Money, money, money. We all need it, but the way we use it and how much we each have of it varies so much. I’m fearful that in many parts of the U.S., more and more many people are developing insensitive, entitled attitudes that are stripping away the best qualities of being human. Recently I found myself wondering, will the widening income gap kill human kindness?
Like It Or Not, We Can’t Escape Money
There’s not a day that goes by that I don’t think about money in one way or another. I’m sure a lot of you would agree. The older I get, the more it’s at the forefront of my mind too. Is my retirement savings on track? How much can I earn this week? Is there a cheaper option than xyz product/service? Am I making money in the stock market? What should I invest in this month? Am I supporting my parents enough? How else can I save and earn more money?
The way we each approach money and investing can be so different. Some people like my mom prefer denial and avoid talking about anything money related; others try to manage their money but give up too quickly due to a lack of experience; some like me find PF (personal finance) fascinating and steadily increase our knowledge; and others are like sponges for anything finance related – the natural experts who constantly teach us new things.
When I was in school, the only personal finance related lesson I remember having was learning how to write a check in 2nd grade. That’s pretty pathetic. A slow but increasing trend to teach personal finance topics in schools is happening though. I sure hope it gains some serious momentum. I wish personal finance basics and investing 101 classes will one day be required in every high school and university. If we want to solve our nation’s widening income gaps and retirement crisis we have to start with education.
Signs Of A Widening Income Gap In The U.S.
The middle class is shrinking and that’s not a good thing. Check out this chart from CNN Money. The most worrisome trend is the increase in the lower class. Ideally if the upper class is rising we’d want to see more people moving from the lower class into the middle class, not the opposite.
Looking further you can see a huge jump in assets of the rich, a marginal increase for the middle class, and a worrisome decline for the poor.
The problem with this chart is the middle and lower class are getting squeezed out. Some blame technology for reducing the number of middle-class wage job opportunities. Another possibility is an increase in the number of people only working part-time or freelancing, which typically excludes access to important benefits such as insurance and employer retirement plans. Increased resentment and tension amongst the middle and lower classes towards the rich is bound to happen if the widening income gap remains unresolved in the coming years.
Are We Becoming A Desensitized Society?
The widening income gap is a hot topic for the upcoming election and I can see why. Many of us feel its effects every day whether directly or indirectly. Stop and look around. Signs of trouble amongst the wealth classes are everywhere. It’s becoming especially prominent here in San Francisco, Silicon Valley, and throughout the greater Bay Area.
One of the most shocking observations for visitors to San Francisco is how many homeless there are here. Whenever I have colleagues visiting SF from New York, and they are always in utter disbelief at how bad it is here. NYC used to have a lot of homeless, but the last few times I visited, I barely saw any. A lot of that is probably due to NYC buying one-way tickets for the homeless to leave the city. Sounds crazy, but it’s true – shipping the homeless somewhere else doesn’t solve the problem.
Anyway, poverty and homelessness are complex problems that are hard to fix. However, that shouldn’t make us become so frustrated or insensitive that we treat the poor and homeless without respect. Unfortunately, more people with wealth are becoming insensitive. For example, a local SF tech developer and entrepreneur named Justin Keller recently sent an open letter to our mayor complaining about the city’s homeless.
Keller’s letter made headlines because it was angry, insensitive, and didn’t provide any solutions. He sounded like what some would call a rich prick, carrying an utterly entitled attitude and lack of compassion. Here’s an excerpt from his letter:
“The wealthy working people have earned their right to live in the city. They went out, got an education, work hard, and earned it. I shouldn’t have to worry about being accosted. I shouldn’t have to see the pain, struggle, and despair of homeless people to and from my way to work every day.”
He went on to call the homeless “riff-raff” and described several unpleasant interactions he experienced with his family. I understand that safety is important, but the wealthy haven’t “earned” more rights than the poor. Yes, the city needs to find ways to help the homeless, but calling them “riff-raff” in such an insensitive manner isn’t helping. Keller sounds like an a$$hole. Sadly, there are likely many others who feel the same way.
With more and more people coming into quick wealth, especially due to the tech boom, we must be diligent not to lose sight of our core values and human kindness. If more people continue to adopt elitist attitudes, oh what a sad and prejudiced future we will face. At the end of the day, we are all human with feelings. Some people face more hardships than others and it isn’t always their fault. Having money certainly doesn’t make it okay to look down on those without.
Let’s All Show More Compassion And Human Kindness
I hope that our next president will help develop solutions to address the widening income gap. If the number of low income households continues to increase things could get a lot worse.
There’s nothing wrong with working hard and making a lot of money – I certainly want to continue to build my income streams – but letting it get to our heads is a dangerous and slippery slope.
Let’s all try to show more compassion and human kindness to one another, especially those less fortunate than us. Every day we can take small steps to come together, stop being selfish, be more caring, and treat one another with mutual respect regardless of how much or how little we have.
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Untemplaters, what type of signs have you seen or experienced in regards to the widening income gap? Do you think more people are developing entitled attitudes that look down on the less fortunate? Are we losing compassion and human kindness?
Dividend Growth Investor says
Thank you for writing this article. I agree that inequality has to be tackled in a way, where those less fortunate are taken care of. Being a human is important, which means we need to be compassionate and trying to help those in need. Perhaps having more social safety nets can turn out to be beneficial ( even if it increases taxes for those earning a lot more).
I think that in terms of homelessness, the government has to tackle the causes behind it. I didn’t know the reasons, until I saw this site:
http://www.nationalhomeless.org/factsheets/why.html (sorry for posting an outside link)
I do agree with the sentiments of Money Beagle above, who is sharing what is really happening in corporations throughout the US in terms of income and stratification of that income.
Yes there are so many different reasons contributing to the growing homeless problem which makes it so complicated to remedy. I just hope it gets better in our lifetime!
Retire by 40 says
Yeah, inequity is becoming much more noticeable. The middle class is struggling and the wealthy class is sucking up all the GDP. It’s a tough problem and I have no idea how we can solve this. I don’t think raising tax is a solution. Maybe the rich needs to invest more in society instead of just increasing their own wealth. It’s a tough problem.
Portland is becoming a tent city. The homeless population here is growing very quickly and the mayor is relaxing the no camping rule.
That’s interesting to hear that Portland is developing a large homeless problem too. I’ve heard people say Portland is a more affordable, smaller version of SF but I haven’t been there myself yet to know if that’s really true or not.
It sad reading about the widening income gap. The rich get richer and do very little to reduce the plight of the poor. The government may try to fix this by raising taxes but the last several decades have shown that does not work. It will be a lot easier if minimum wage were raised sufficiently to help everyone get by.
I think many rich people do a lot to help the poor but that alone isn’t enough. Some of the richest people I know are incredibly generous and donate crazy amounts of money to non profits and charities. I think raising the minimum wage could definitely help a lot of people. The tricky part is finding an amount that helps shrink the income gap without putting a lot of small business owners out of business who may struggle to afford higher operating costs.
Financial Slacker says
I whole-heartedly agree that the widening income gap is a big problem. A large gap contributes to increased crime and overall social unrest.
That said, I am also frustrated with the rhetoric about simply raising taxes on the “wealthy” in order to “redistribute the wealth” and level the playing field. (I hate using that term as it has become so highly politicized, but it does seem to reflect a prevailing viewpoint).
Raising taxes is not the answer. The goal is to raise the bar for everyone.
And although I don’t think there are easy answers, one area that can make a difference is the educational system.
It has been shown many times that the higher one’s education, the greater the income that individual receives over their lifetime. Yet, I see so many homes that do not place any value on getting a good education.
Until that disconnect between education and success is resolved, I feel we will continue struggling with this issue.
Yeah I agree with you that taxing the wealthy is not going to fix the problem, at least certainly not by itself. I also highly value education – especially business and personal finance related education the older I get. So many young people have no idea there’s a retirement crisis and have absolutely no interest in opening a retirement account because they don’t think it’s important. We need schools to educate students about money, business ethics, accounting, investing, etc in addition to math, science and English.
Money Beagle says
Many middle class workers are used to receiving notices that bonuses and salary increases are meager, if not altogether cancelled, and that contributions for retirement and health care are to come more out of their own pockets, then they look and see that their C-level ‘bosses’ are getting huge raises and bonuses.
It’s the new norm. It’s gotten to be where the rich take their piece of the pie and the rest gets split, but the only problem is that the rich never have enough, so once they’re done taking, that’s it. Nothing left. Not even crumbs.
This continues to squeeze the middle class and further squeezes the lower class, and everybody just keeps getting more and more squeezed.
Except the rich, of course. They’re fine.
This is why I like watching the show Undercover Boss. So many CEOs become so detached from what’s happening on the ground at their companies that they lose sight of a lot of things. It’s really awesome when you get to see them come around and find ways to help certain individuals and work on making larger changes at their firms for the better good.
Financial Samurai says
The widening wealth gap is society’s BIGGEST problem imo. In a bull market, the rich get MUCH richer, and the poor left wondering “where’s the trickle down?” Eventually, there will be a revolt. Rich folks need to be prepared.
The good thing about living in 2016 though, is that people have more access to info and better technology than ever before.
Justin Keller annoys the heck out of me with his “earned the right to live in SF” comment. Bad form!
Yeah it’s definitely concerning. I hope we never have to see a day when there’s a big violent revolt or something like that. And yes, it’s fantastic that technology is helping share so much knowledge so quickly.
Keller really didn’t think things through when he submitted that letter. I don’t think he had any idea it would blow up in his face as much as it has. Hopefully he will be more compassionate and respectful in the future after his experience.