O mito do 1% de ricos, que estariam extraindo (ou "roubando" na linguagem de alguns) "riqueza" dos outros 99%. Além de mito é uma bobagem que não é confirmada pelos dados, como este estudo de Jonathan Rothwell demonstra. De resto, se alguns estão ganhando (ou "extraindo") mais do que deveriam, tal se deve às restrições impostas pelas guildas profissionais (a tal "conspiração de comerciantes", ou de quaisquer outros grupos profissionais, de que falava Adam Smith), que restringem o acesso de concorrentes a seus mercados protegidos, ou à ação do próprio Estado (ou do príncipe) que atua para manter carteis e monopólios, os "happy few" que os financiam. Por isso que as soluções "pikettyanas", que são as de interferir nos mercados e promover uma redistribuição forçada via Estado, são erradas e só podem redundar em menor criação de riqueza. A "solução" (sempre imperfeita no mundo dos humanos) é a expansão dos mercados, quebra de carteis e monopólios, e permitir a mais ampla concorrência. Eu começaria pelo mercado de dinheiro...
The spectacular economic rise of the top 1 percent is now common knowledge, thanks in large part to the work of
Thomas Piketty and his collaborators. The top 1 percent of U.S. residents now earn 21 percent of total national income, up from 10 percent in 1979.
Curbing this inequality requires a clear understanding of its causes.
Three of the standard explanations—capital shares, skills, and
technology—are myths. The real cause of elite inequality is the lack of
open access and market competition in elite investment and labor
markets. To bring the elite down to size, we need to make them compete.
Myth 1: Capital vs. labor share
In his recent and otherwise valuable book,
Saving Capitalism: For the Many, not the Few,
Robert Reich claims that the share of income going to workers has
fallen from 50 percent in 1960 to 42 percent in 2012. Meanwhile,
corporate profits have risen. In short: trillions of dollars have gone
to capitalists instead of workers. The sensible policy responses, as
Reich and others have stressed, are to increase taxes on corporate
income and capital gains, and widen capital ownership.
These might be a good idea for other reasons, but the basic facts
currently being used to justify them are wrong. Between 1980 and 2014,
corporate profits actually represented a lower share of GDP (4.9 percent) than between 1950 and 1979 (5.4 percent).
Income from the main four capital sources— dividends, interest,
rental income, and proprietor income—has nudged upwards as a share of
GDP by just one percentage point between these two periods, and entirely
because of higher interest income, which mainly goes to retirees who
own Treasury bonds.
So, what’s going on here? The simple explanation is that wages and
salaries are an inadequate measure of the share of economic benefits
flowing to labor. Wages and salaries have declined as a share of total
income, largely for two reasons. First, total national income includes
government transfer payments, which are rising because of an aging
population (e.g., Social Security and Medicare). Second, companies have
greatly increased non-salary compensation (e.g., healthcare and
retirement benefits). Total worker compensation plus transfer payments
have actually slightly increased as a share of total national income,
from 79 percent between 1951 and 1979, to 81 percent for the years from
1980 to 2015:
Myth 2: Super skills lead to super riches
In his “
defense of the one percent,”
economist Greg Mankiw argues that elite earnings are based on their
higher levels of IQ, skills, and valuable contributions to the economy.
The globally-integrated, technologically-powered economy has shifted so
that very highly-talented people can generate very high incomes.
It is certainly true that rising relative returns to education have driven up inequality. But
as I have written earlier,
this is true among the bottom 99 percent. There is no evidence to
support the idea that the top 1 percent consists mostly of people of
“exceptional talent.” In fact, there is quite a bit of evidence to the
contrary.
Drawing on state administrative records for millions of individual Americans and their employers from 1990 to 2011,
John Abowd and co-authors
have estimated how far individual skills influence earnings in
particular industries. They find that people working in the securities
industry (which includes investment banks and hedge funds) earn 26
percent more, regardless of skill. Those working in legal services get a
23 percent pay raise. These are among the two industries with the
highest levels of “gratuitous pay”—pay in excess of skill (or “rents” in
the economics literature). At the other end of the spectrum, people
working in eating and drinking establishments earn 40 percent below
their skill level.
Using data from an OECD cognitive test of thousands of Americans and adults from around the world (
the PIACC),
I find that workers in the financial and insurance sector get a pay
bump equivalent to a decile of the earnings distribution (e.g., pushing
them up from the 80
th to 90
th percentile). This is the largest premium aside from the quasi-monopolistic mining and utilities sectors:
At the occupational level, CEOs are paid 1.5 deciles above their
“IQ.” Health professionals also receive a very large boost in earnings.
Using microdata from the Census Bureau, I find that the “gratuitous
pay” premium in certain industries has increased dramatically since
1980. Workers in securities and investment saw their excess pay rise
from 41 percent to 60 percent between 1980 and 2013. Legal services went
from 27 percent to 37 percent. Hospitals went from 21 percent to 39
percent. Meanwhile, those working in eating and drinking establishments
consistently hovered around negative 20 percent:
Myth 3: Technology
Some entrepreneurs grow enormously rich as a result of founding a
company with an innovative product. This applies to Mark Zuckerberg, as
well as to Bill Gates and other mega-stars of the tech sector. Venture
capitalist
Paul Graham has recently written about this as an important aspect of inequality, and he’s correct. It is. But again, it has little to do with the rise of the 1 percent.
Take some of the most important tech industries: software, internet
publishing, data processing, hosting, computer systems design,
scientific research and development, and computer and electronics
manufacturing. Combined, they represent just 5 percent of workers in the
top 1 percent of income earners.
So, if they're not in Silicon Valley making awesome stuff, where are
the 1 percent working? Top answer: doctor’s offices. No industry has
more top earners than physicians’ offices, with 7.2 percent. Hospitals
are home to 7 percent. Legal services and securities and financial
investments industries account for another 7 and 6 percent,
respectively. Real estate, dentistry, and banking provide a large
number, too:
Computer systems design is the only tech sector among the top contributors.
There are five times as many top 1 percent workers in dental services as in software services.
CEOs are of course more likely to be in the top tier, especially if
they are in certain privileged industries: 28 percent of CEOs from the
financial sector, for instance, and 26 percent of those in hospitals.
(But 15 percent of college presidents are in the top 1 percent, too.)
So if technology, skills, and capital shares can’t explain the rise
of the top 1 percent, what does? And what can we do about it?
A non-elitist investment market
One way that the top 1 percent cements their position is by occupying
the financial sector, and accessing above-market returns on their
investments.
The large and
growing prominence of the financial sector in terms of excess pay has a great deal to do with hedge funds, which barely existed before the 1980s but are now
integrated into mainstream investment banks like Goldman Sachs and hold
over a trillion dollars in assets from pension funds, university endowments, and other institutional and private investors.
A hedge fund is a loose term referring to an investment portfolio
that is less regulated than other funds, because only very rich
individuals or approved institutions (
accredited investors or
qualified purchasers)
can participate in it. This regulatory distinction allows hedge funds
to take more risk, borrowing levels of money that greatly exceed their
assets (and avoid many onerous reporting requirements). These regulatory
advantages have
allowed hedge funds to consistently outperform stocks and other assets by roughly 2 percentage points each year.
The accredited investor rule has mostly been ignored by scholars of inequality. But legal scholars
Houman Shadab,
Usha Rodrigues, and
Cary Martin Shelby
are an exception. They have each written persuasively about how the
rules contribute to inequality by giving the richest investors
privileged access to the best investment strategies. Shadab points out
that other countries (with less inequality) allow retail investors to
access hedge funds.
The law has also inflated the compensation of hedge fund workers—
roughly $500,000 on average—by
restricting competition. Mutual funds—which charge tiny fees by
comparison—are currently barred from using hedge fund strategies because
they have non-rich investors. If the law was changed to allow mutual
funds to offer hedge fund portfolios, hundreds of billions of dollars
would be transferred annually from super-rich hedge fund managers and
investment bankers to ordinary investors, and even low-income workers
with retirement plans. A House
committee recently approved
a bill that would slightly ease the accredited investor rule. Even if
it became law, the bill would be a modest step—but at least one in the
right direction.
A non-elitist labor market
At the same time, we need more competition at the top end of the labor market. As economist
Dean Baker points out,
politicians and intellectuals often champion market competition—but
what they mean by that is competition among low-paid service workers,
production workers, or computer programmers who face competition from
trade and immigration, while elite professionals sit behind a
protectionist wall. Workers in occupations with no higher educational
requirements see their wages held down by millions of other Americans
denied a high-quality education and competing for relatively precious
vacancies.
For lawyers, doctors, and dentists— three of the most
over-represented occupations in the top 1 percent—state-level lobbying
from professional associations has blocked efforts to expand the supply
of qualified workers who could do many of the “professional” job tasks
for less pay. Here are three illustrations:
- The most common legal
functions—including document preparation—could be performed by licensed
legal technicians rather than lawyers, as the Washington State Supreme Court
decided in 2012. These workers could perform most lawyer-like tasks for
roughly half the cost. Unsurprisingly, legal groups opposed it. A few
brave souls from the Washington State Bar Association board resigned in
protest, and issued this statement:
“The Washington State Bar Association has a long record of opposing
efforts that threaten to undermine its monopoly on the delivery of legal
services.” Proportion of lawyers in the top 1 percent? 15 percent.
- Many states
allow nurse practitioners to independently provide general and family
medical services, freeing up physicians to provide more specialized
services. But most larger states do not. Again, typical nurse
practitioner salaries are roughly half those of general practitioners
with an MD. But, of course, physician lobbies stridently oppose the idea. Proportion of physicians and surgeons in the top 1 percent? 31 percent.
- Dental hygienists can perform many of the functions of more far expensive dentists, but regulations vary by state and in all but a few states,
it is not possible for hygienists to own and operate their own
practice. My analysis shows that just 2 percent of hygienists are
self-employed compared to 63 percent of dentists. Proportion of dentists
in the top 1 percent? 21 percent.
Recently, the
head of the Federal Trade Commission testified
before the U.S. Senate on how state occupational licenses, such as
these, often hinder competition and harm consumers, though her agency
has very little authority to intervene.
Less Karl Marx, more Adam Smith
The modern left still too often sees the world through a Marxist lens
of capitalist owners trying to exploit people who sell their labor for a
living. But that doesn’t help explain rising top incomes. On the other
hand, many on the modern right wrongly infer that great earnings must
only be generated by great people.
Progressive thinkers tend to revert to an anti-market stance, which
means they reach for the wrong solutions in terms of policy.
Conservatives, meanwhile, are often keen to remove regulatory barriers
to competition, but still defend the financial sector and other elite
earners.
Before Marx,
Adam Smith
provided a framework for political economy that is especially useful
today. Smith warned against local trade associations which were
inevitably conspiring “against the public…to raise prices,” and
“restraining the competition in some employments to a smaller number
than would otherwise…occasion a very important inequality” between
occupations.
For earnings to be distributed more fairly, our goal is not to stand in the way of markets, but to make them work better.
