Income gap

The income gap in the US is leading young people to look favorably on socialism where equality is a promise. The uneven wage growth is the result of several things including the movement of manufacturing jobs overseas and the decline of unions but one factor often overlooked is simple math. If I earn $50,000 per year and you earn $150,000 you have $100,000 more than I. If over the next 20 years we both get 3% annual raises you will be earning $271,000 and I will be earning $90,000 and that leaves a difference of $181,000. Carry this out over the past 60 years and a large income gap is expected. The same thing happens with wealth. If I have $90,000 in my savings and you have $50,000, I have $40,000 more. Let us both earn 10% and in 20 years I have $605,000 and you have $335,000 or $270,000 more than you. This is the reason for the old saying the rich getter richer and the poor get poorer. It’s all about arithmetic.