Income Spread

PULLING
APART
A State-by-State Analysis
of Income Trends
Jared Bernstein
Elizabeth McNichol
Karen Lyons
January 2006
http://www.epinet.org/studies/pulling06/pulling_apart_2006.pdf

This is a good Study, but expresses the greatest detriment to effective Wage adjustment: the idea that Government can properly regulate Incomes. The largest discriminate in Wage allocation in the American economy comes from Business use of Welfare transfers in Wage placement. Welfare transfers simply negate Labor demands for a Living Wage. Business sets Wage rates which force lower-waged Labor to seek Government assistance.

The major element in Wage demands is meeting Living Costs. Business utilizes any option to minimize those Living Costs--including generous tolerant Parents, Government Housing subsidies, tax-free Mortgages, and the Social Security system. The trouble is compounded by the Economic belief that any restrictions upon Business--financial or otherwise--will curtail total Employment to some degree; this is a belief that has never been adequately tested statistically, and regulation could actually generate increase of Employment levels. A government demand that Business supply full Living Costs to their Employees in the form of Wages and Benefits might not even affect long-run Business decisions of Employment levels.

The elimination of Tax incentives for Business operation could also increase long-term Employment levels beneficially. Tax incentives, Today, allow for business investment no matter where the location of said investment. Insistance on tax incentives only for native investment would perdictably increase Employment rolls inside the governing district. Much of the offshoring of business investment comes only from Tax allowance of tax advantage for this investment. Much could be changed with only the alteration of Taxation. lgl