Inequality income is of great concern to social scientists, according to the article on Wikipedia. The rich are getting richer, and the income of the poor is stagnating. Why it is happening?

In reality, prior to 1970, according to the chart on Wikipedia, the rate of growth of income for both rich and poor increased at the same rate. So it seems that prior to 1970, you could say that inequality income was not a problem since everyone was creating wealth at the same rate.

Inequality Income is the difference between the wages of the rich and poor. Source: Wikipedia

The article attempts to explain why after 1970 the rich got richer (which continued at approximately the same rate as it was prior to that time), and why the less wealthy just stopped improving. The causes for inequality income, according to the article were:

1. The rich families worked more hours. Their spouses also went work, so they had two-income families. At the same time, the lower income families worked less. Additionally there was a rise in divorce rates among the poor, which meant more single-parent households (fewer two-income families).

2. The rich families are better educated with more advanced degrees. The more educated you are, the higher your income.

3. Oppression – Minorities and women are paid less for the same work done by white men.

4. Increases in immigrants. Foreign-born workers went from 5% of the workforce in 1970 to 15% in 2005. These workers were willing to do the work of the lower income families for less wages.

5. Rise in compensation based on performance, rather than based on seniority.

There was one little statistic in the article that I found really interesting, but they didn’t really develop the idea like I thought they would. It may be a major cause to inequality income. The article says that for lower class people, “the most common source of income was not occupational status, but government welfare.”

In other words, lower income levels depend more on government welfare for their money than on actually “working.” That would seem to indicate, that the rate at which the government is paying welfare is not keeping up with the growth rate in income of people that actually work.

While some people may consider this inequality income an injustice, I look to the Bible as a source of explanation:

… keep away from every brother who is idle and does not live according to the teaching you received from us. For you yourselves know how you ought to follow our example. We were not idle when we were with you, nor did we eat anyone’s food without paying for it. On the contrary, we worked night and day, laboring and toiling so that we would not be a burden to any of you. We did this, not because we do not have the right to such help, but in order to make ourselves a model for you to follow. For even when we were with you, we gave you this rule: “If a man will not work, he shall not eat.” 2 Thessalonians 3:6-10 (NIV)

That’s harsh, isn’t it?

“If a man will not work, he shall not eat.”

Note that the word “will” is used here. That implies a “choice” made by the person, not that he is physically unable to work. If the person is physically incapable of working, the phrase would have said “If a man can not work…”. In my opinion, if the word “can” was used, then there would be an obligation to feed the person. The bible is very specific in the words that it uses, so the word “will” is very important here.

So if they are physically able, and have made a choice not to work, then they shouldn’t be fed. In fact, if you look at the beginning of the text, you should keep away from the person that has made a conscious choice to be idle. Furthermore, it makes no mention of “finding work.” Why? Because work is always available, even if it does not receive a salary. So “welfare,” which pays people while they are trying to “find work” is not biblical. If they were doing something useful, such as picking up litter along the highway in addition to going out and finding a source of income, that might be acceptable.

In this day and age, these types of statements are considered very uncaring. But that is not the way it was when our country was founded.

In 1620, the first boatload of pilgrims landed in Plymouth Rock faced a seemingly unbearable situation. Of the 102 people that came over on the Mayflower ship, 47% (almost half) died during the first winter, including the original leader of the colony. The replacement leader, William Bradford took a lot of bold actions in order to keep the colony going.

Pilgrims getting ready to embark to America. Source: Wikipedia

What is not commonly taught in schools was that the voyage of the pilgrims was paid for by wealthy investors from Europe. Each pilgrim signed a contract before getting on the Mayflower. The contract basically set up a socialist utopia. All the crops produced by each family were to be shared equally by the community, and a portion also went to the investors. Even the houses in which they lived were owned by the community.

In order to keep the contract intact, William Bradford, a devote Christian, laid down the law. In the book “The Journal of the Pilgrims at Plymouth: in New England in 1620” we read: “He set them all at work, and would have none idle in the community, being resolved that if any would not work, neither should they eat.” Does that sound familiar? It should. You read it above in the bible passage.

But even with biblical imposed values on the community, it was a complete failure. The younger men, who should have produced far more than the weaker community members, didn’t produce to their full capability. The new socialistic utopia was on the verge of collapse.

Being the wise man that he was, William Bradford changed the contract. He gave everyone a piece of land, and they could keep everything they produced in their fields. By implication, if they didn’t produce, they weren’t going to eat, because it was unlikely that their neighbor was going to support them after the failed socialist experiment.

The result of this one change was phenomenal. Each individual’s capitalistic tendencies produced such a great harvest, that they had an abundant surplus and were able to quickly pay off their debt to the investors in Europe.

Now other people in Europe saw what freedom and capitalism could do, and during in next 20 years, 40,000 people boarded the dangerous wooden ships bound for America.

Why didn’t the socialism experiment succeed at Plymouth Rock? After all, if you didn’t work, you didn’t eat.

I’ll leave that question for you to think about today, and we’ll come back to it again tomorrow. The answer is all about creating wealth and overcoming income inequality. It is another example of how to make money, God’s way.
Scripture taken from the HOLY BIBLE, NEW INTERNATIONAL VERSION®. Copyright © 1973, 1978, 1984 Biblica. Used by permission of Zondervan. All rights reserved.

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  • http://www.simplesurvivalguide.com Rob Northrup

    As Robert A. Heinlein said, “Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right thinking people. Whenever this tiny minority is kept from creating or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.”

    In a modern open-market capitalist society, entrepreneurs get rich and the poor get better off as a result — OF COURSE they’re not going to get as rich as fast (duh). So, of course the gap thereby gets wider — but the top AND BOTTOM of the gap both rise to levels much higher than before. The gap is widening?? Well, hooray for everyone’s sake! ESPECIALLY the poor!

    Seize the Day,
    Rob

    Simple Family Survival Tips For Disasters and Emergencies

    • Austin

      Does poverty make sense? I was only an idea before I was conceived; I didn’t exist. Is there any reason, any cause, any logic for poverty or is that solely among riches?

  • http://www.aprilbraswell.com/BoomerDating.html OC Boomer Dating Expert

    Hi Tim,

    In fact, I know both that Biblical citation and that requirement from the Plymouth colony. Have ever read: http://www.visionforum.com/sea.....ctid=84149

    It is essentially both written by Wm Bradford himself. I like to read original sources as often as possible and often read quite a variety of works.

    Incent people to do something, certain both for their own survival and then also they see for their own betterment, should they crave that for themselves, their families, and their children.

    Happy Dating and Relationships,

    April Braswell
    Christian Dating Expert and Internet Personals Dating Coach

  • http://TheSuccessSecrets.net Michael D Walker

    Fascinating history lesson!

    Did not know how the original pilgrims got here because I was taught in public school, where fantasy & happy endings are used instead of simple lessons kids would understand & benefit from.

    Now you’ve got me wanting to read more about this.

    Thanks!

    Michael
    The Success Secrets

  • http://www.EslLessonUsingSocialMedia.com Eileen O’Neill

    Great history lesson, Tim. Didn’t know that the socialist experiment started so early in history.

    As for why it didn’t work for the Pilgrims – I would guess that the lower aspects of human nature kicked in, i.e., if someone else is willing to do my work and feed me – and it’s a free handout… why should anyone work?

    Looking forward to tomorrow’s post!

    Eileen
    ESL: A Business?
    7 Ways To Use Twitter For Marketing

  • http://www.directsellingadvice.com Mark

    Sadly,like you said Tim most people in the US don’t know much about first colonies histories outside of trivial or revisionist views. Amazingly we have many of their orginial documents and shouldn’t need anyone to ‘explain’ what was ‘meant’.

    My captcha phrase interestly is “in spiritual”
    Mark
    Direct Selling Advice, Leveraging Relationships for Long-term Profit

  • http://www.kevinhogan.com kevin

    Tim,
    this is a great article.
    I think you hit the nail on the head when you mention divorce and two incomes.

    single people cannot make it at a level of “comfort” americans are familiar with…not anymore.

    the 60’s brought all kinds of changes and divorce was one of them. Divorce makes more paupers than just about anything. You take a couple earning 100K cut that in half and you have a disaster.

    40% of children today in the USA are born outside of marriage. That’s people’s own choice but the drawback is the extra bit of cement in the glue that keeps people together.

    Thinking the grass is greener over there or “by myself on my own, I don’t need her/him” is crazy thinking.

    At 100K it takes next to nothing to rip apart a family financially. At 50K….oh man….

    And that is the deal.

    “The poor” is a result. Like wealth, often inherited, typically inherited. BUT because people are so overconfident of their ability to strike out on their own, they take two incomes out of a home and put one there and “the poor” is now a result of inheritance and also foolish nonrational choices.

    As much as the big banking rip off of America ticks *me* off, the fact is that this has next to nothing to do with the poor.

    I think the other disaster was giving people the illusion that they could “own” a house, when they didn’t even own the shoes they wore. Government allows for the poor to have the “right” to buy a house and that creates another disaster.

    Where the person had mediocre credit, now it takes three jobs to pay the mortgage, two to pay the rent and especially in subcultures where divorce is even more likely, this is just another formula for a mess.

    The future for the society as a whole is grim because no one can legislate wisdom or hope or responsibilty or decision making.

    The future for an individual who wants to have a good life…really wants it…is still quite good. The system is tilted against the person who wants to work two jobs because they will pay 3 times the taxes which is absolutely crazy. The government would like to see EVERYONE poor but productive of course…

    But the great thing about people of faith is they tend to stay married…longer…that creates financial (translate to survival) stability and even when the world is going crazy inside the house, they STILL have a house.

    I’ve gone on far too long. I just remmebered that I don’t live here and I hope you won’t charge me too much rent for having taken up so much space for so long….

    Kevin Hogan
    Author of The 168 Hour Week: Living Life Your Way 24/7

  • http://www.babysittingworld.com Lisa McLellan

    About twenty minutes south of me is Plymouth Plantation where you can go question the pilgrims about these things and they’ll tell you in old English just what happened. Great place to visit.

    Lisa McLellan
    Babysitting Services, Nanny Services, and Nanny agencies

  • http://www.scottbellconsultant.com Scott Sylvan Bell

    Tim you mean to explain socialism doesn’t work every time it has been tried. Man I wonder why that is. People have to work to support others for the “good” of others. I would also like to point out that some of the dumbest people I have ever met have advanced degrees another aspect of the flawed logic of the social beasts.
    Scott Sylvan Bell

  • http://workoutwithsabrina.com Sabrina Peterson

    I have never understood people choosing not to work. I can think of few reasons one would actually NEED to be 100% supported by welfare.

    I think the article you cite (as well as the Plymouth story) goes to show that those who work hard reap the most reward.

    Sabrina Peterson, NASM CPT, CES
    Corrective Exercise for Every Body

  • http://www.childrenswealth.com Dale Bell

    I can not believe that rich people work more than poor people.
    The more we live in a society that beleives that you owe me the rich will get richer and give the lazy people some to get by on.
    If I want more money I work harder I dont ask for hand outs.

  • http://www.ColumbiaSafetyProducts.com/blog Mike Norris

    Did not know this about the Pilgrims. The thing about getting a handout from the government is you barely get enough to survive on. I would rather work and have a better life.

    Mike
    http://www.ColumbiaSafetyProducts.com

  • http://www.yourchanceforromance.com Sonya Lenzo

    The truly sad thing about those living on handouts is that they never experience the joy of accomplishment.
    Sonya Lenzo
    http://www.yourchanceforromance.com

  • Pingback: From Opportunities To Legitimate Wealth | Make Money God's Way()

  • http://www.stevechambers.com Steve Chambers

    We have strayed far from the principle, “He who will not work, does not eat”, which is sad because, although it sounds cruel, making a man work for his existence and sustenance is truly freeing.

    Also, not coincidentally, we went off the gold standard in 1973 and have been debasing the currency ever since. Dishonest money is the first step in enslavement.

    Steve Chambers
    Body Language Expert

  • http://dtingguruhq.com michael

    I have always been a fan of staying married.

    If a guy gets divorced he is only worht 30% of his old income after paying everything off.

    It’s a shame.

    Some people don’t get married now because they fear being made poor after a marriage breaks up.

    that’s sad because it will only lead to a lonely life.

    Michael
    http://datingguruhq.com

  • http://successfulsalestools.com bryan

    Great article. The point is that if you work and work harder you will get more. Many people I know only want to work their 40 hour week…guess who was the first to be laid off? those same people..

  • Austin

    Where am I heading and if it’s not good, how can I change that?