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The year is 1986. For one recent college graduate, it’s the best of times. For another recent college graduate, it’s the worst of times.
Let’s now look at some key stats for these recent college graduates—one who happens to be me, and the other who happens to be my cousin.
| Me | Cousin | |
|---|---|---|
| Family Socioeconomic Status | Middle Class (My dad was a cop and my mom was a medical records clerk.) | Middle Class (My cousin's mom was a teacher and I don't remember what her father did. I have a vague recollection that he was a machinist in a tool and die factory.) |
| SAT Score (Math + Verbal) | 1100? (1080 sounds right, but I'm also remembering 1120.) | 1500? (For some reason I'm remembering 1520. All I know for sure is that she got over 1500.) |
| College | Buffalo University | Dartmouth |
| College Selectivity | Moderately Selective. (When I got accepted to UB in 1979, it was definitely a third tier school. It didn't come close to the Ivies and the Public Ivies in terms of academics and prestige.) | Super Selective. (Easily one of the top 50 colleges in America.) |
| Freshman Year | 1979 | 1978 |
| Major | Sociology | Finance? (Not exactly sure what my cousin majored in. All I know is that she got her BA and MBA in five years.) |
| Income in 1986 | $17,000 | $100,000? (Can't say for sure what my cousin's income was back in 1986. I do remember Groovy Mom telling me that she was making over six figures between salary and bonus.) |
When I look at these key stats from way back when, I see the income inequality between my cousin and me and I weep. What the heck happened? Why was my guardian angel, the vaunted patriarchy, so cruel to me and so kind to her? She did have female plumbing, after all. And she did identify as a female. Shouldn’t those key stats be reversed, with me having the more impressive CV?
Here’s a shocking truth that I don’t see bandied about very often: sometimes income inequality is the epitome of fairness and justice.
There’s a reason why my cousin was making big bucks and I wasn’t. There’s a reason why she was crunching numbers for a high-powered financial firm in Boston and I was scraping dead animals off the road for a rinky-dink highway department on Long Island. She was smarter, more skilled, and more driven. In short, she had way more to offer mankind than I did (in an economic sense, of course). Not too many people have the brains to handle big-time finance. Any well-manicured ape can scrape dead animals off the road.
In this post, then, I rise in defense of income inequality (how’s that for pomposity!). Income inequality is merely a messenger—an economic scorecard, if you will. Person A makes more than Person B, and Person B makes more than Person C. Sometimes income inequality is the result of artificial bias. The government blocks Person B and Person C from competing against Person A and Person A takes advantage of his ill-gotten monopoly. But more often than not, income inequality is the result of impartiality. My cousin got more because she was more. It’s as simple as that.
Note to anyone who is unhappy with his or her current income: If you want more, become more. Hone your skills, burnish your attitude, and sharpen your drive—give and you will be given unto. “The system” isn’t nearly as “rigged” as you suppose. There’s a crapload of cosmic justice out there.
Groovy Ranch Update
We’re moving into the home stretch for Groovy Ranch. The cabinets and the screened-in porch are done. Next week the measurements for our quartz countertops will be taken. As Mrs. Groovy is wont to say, “This sh*t is getting real.” Here’s a picture of the kitchen.
Here’s a picture of the built-ins that flank our shiplap fireplace.
And here’s a picture of the completed screened-in porch.
Final Thoughts
Okay, groovy freedomist, that’s all I got. My virtual tour to promote my opus is rolling along. This week my interview with “The Girls” (J and Gwen from Fire Drill Podcast) came out. Check it out when you get a chance. And have a super groovy weekend. Peace.
Well said Mr Groovy! I agree you are paid commensurate to the value you provide to an organization or to society. If your interested in a pay raise go above and beyond, and your value will be recognized, and with that your income will be positively impacted. Great “on the mark” post!
There needs to be more open discussion on this topic! People think it’s unfair to be paid less than someone else but they don’t like to think about why the person is being paid more. Like you said, if you offer more, you will be paid more. You might have to go somewhere else to be paid more, but if you are doing enough to command a certain wage, you can show people this and they’ll be happy to pay you for what you do. Really enjoyed this post!
Millionaire Dojo recently posted…How to End the Paycheck to Paycheck Cycle for Good
Fascinating! I encountered two furniture movers recently who were talking about how silly a major like finance was. It’s only something for the blue bloods or something.
I think they thought of themselves as real working/ middle-class people and finance as a field that is meant for spoiled rich children who has a few dollars to play with their parents’ money.
From my upbringing, I grew up with the same notion too – obvi not anymore but for a large part of my life. Money = bad topic, finance = bad people.
That is a very creative idea putting your stats against your cousin during the same time period.
In a capitalist society you tend to get rewarded for what you bring to the table (although of course some people do have a pretty significant advantage if family is well off or famous). But apart from these outliers most people can raise themselves to higher stations in life based on merit and hard work.
In India there is a caste system in place and you are relegated to that your entire life unless you happen to marry into a higher caste which is not that common.
By the way great progress on groovy ranch. Interior looks amazing
Xrayvsn recently posted…Ultimate Checklist To Follow When Your Kids Move Out | Empty Nester
“But apart from these outliers most people can raise themselves to higher stations in life based on merit and hard work.”
I wholeheartedly agree, my friend. We have a lot of problems in this country (what country doesn’t), but if you respect your fellow man and work hard, you’ll do well. Habits are destiny.
I love the built-ins — great idea for our future home. 🙂
Do you think you’ll be in your home before Thanksgiving?
Claudia @ Two Cup House recently posted…Ad Astra Per Aspera: A Rough Road Leads to the Stars
Thanks, Claudia. We should be in by Thanksgiving. It’s going to be close. When are you and Garrett rolling through North Carolina again? You know you’re always welcome at Groovy Ranch.
Thanks, Mr. G! I think we’re looking at late this year or early next. We will keep you posted.
Claudia recently posted…Ad Astra Per Aspera: A Rough Road Leads to the Stars
Love this line, “Note to anyone who is unhappy with his or her current income: If you want more, become more.”
Agreed.
Ms. Fiology recently posted…Brain Health, part 2 – Stressed Brains
And it’s so much more practical. Imagine making your advancement dependent on others becoming better human beings! That’s a recipe for failure if I ever saw one. Thanks for stopping by, Ms. F. It’s always a pleasure hearing from you. Cheers.
I like this post. Every time someone rails against people in finance, I just want to say they probably don’t know how difficult it is. Every time people complain about how people in those jobs get it because of their parents, I get pretty annoyed. I worked hard to get where I am, and there actually aren’t that many people whose parents had connections in most analyst classes I met. Obviously it might be harder, but if you’re smart and hard-working, it’s not impossible. Luck plays a factor, once you’ve done the hard work.
And what?! You seem so smart. I’m sure if you studied for the SAT a little bit more, you’d get a crazy high score.
Nailed it, Olivia. Luck plays a factor, for sure. But you can’t rely on that fickle beast. Your primary responsibility is to become worthy of success–be a good person, hone your skills, and figure out how you can help your fellow man. Do that and good things will eventually happen. Heck, fickle luck might even stop by to land a hand. Cheers.
If you ever read about Pareto distributions and Pareto analyses in business classes, remember that Pareto was the first to describe the 80/20 rule as it applied to net worth in Italy and pea production in his garden. This leads me to believe that income inequality is a mathematical certainty. The Savior told a parable of managers entrusted with 10, 5, and 1 talents (large monetary units) and this leads me to think that economic inequality is woven into the fabric of my faith. And Moses came down from the mount with the Ten Commandment prohibiting coveting.
These facts explain, to my satisfaction, the failures of socialist societies both economically and morally. These democratic socialism relies upon the majority’s envy of the productive minority to win votes for politicians who promise to “fix” economic inequality through redistribution of wealth from the more productive minority to the less productive majority. Since they will invariably fail, the net result is a discouraged (or exiled) productive element, less wealth creation, and power to the politicians controlling wealth redistribution.
This also explains the hostility of Commies toward Christians and Jews.
steve poling recently posted…Dave Ramsey Heresy
“Since they will invariably fail, the net result is a discouraged (or exiled) productive element, less wealth creation, and power to the politicians controlling wealth redistribution.”
Couldn’t have explained it better, my friend. Socialism kills competition. And without competition, say goodbye to competency, efficiency, and innovation. And without competency, efficiency, and innovation, you get Cuba, North Korea, and Venezuela. Not good.
I think competition clarifies the Pareto differences between 10x producers and the rest. It serves to speed information flow from winners to losers as the losers reform their methods to better compete in the future. But keep in mind that the same math works in noncompetitive things like computer code optimization. If socialism could reward 10x producers more than wealth redistribution punishes them, it might be economically viable. China killed its smartest people in the cultural revolution because when you’re smart you can create more wealth this targeting wealth aims at robber-barons, but hits scholars.
Did Robert Kiyosaki interview when he wrote Rich Dad Poor Dad? In this case, it’s rich grad/poor grad.
That’s awesome to see the comparisons. From my experience with the Ivy Leaguers, they do seem to be “book smart” and retain more information than the average person. Plus, their connections help them get a head start in life.
But, it’s what they do with that knowledge and connections that matters.
I know that’s not the entire point of your article, but sometimes hitting bottom is the motivation we need to change life.
One advantage the average person has is living in the real world. I tend to think “street smarts” is more valuable than many care to admit. You just have to decide how to use it for more than surviving.
Josh recently posted…Our 2018 New England Fall Trip: Vermont, Boston and Yale
LOL! I like that…rich grad/poor grad. And I hear what you have to say about connections, my friend. No doubt they can make or break a person. That would be an interesting book. How the successful found or cultivated connections. Perhaps the “Connected One Nextdoor” will be my next opus. Cheers, my friend.
Not to start an argument here, but I believe income inequality when it comes to women and men in the workplace would mean in this scenario, if all things were the same between you and your cousin, you as the male financial worker vs. she as a female financial worker would have made more just by being one of the boys.
Sure there are different income inequalities, but I think when you compare two people of entirely different directions based on the type of income inequality most people discuss between the genders it doesn’t add up.
I have seen two people get hired for the same job, the woman making less, yet both just as qualified in the same field. That to me is inequality when all else being equal except salary based on gender. Otherwise, yes, of course, your cousin made more, she chose a more lucrative career path in finance.
Kate recently posted…That Day.
Excellent point, Kate. I tried to pick someone as comparable to me as possible. The key characteristics for me were age, family structure, socioeconomic status, and education. In other words, my cousin and me were similar in age and both came from good families with middle-class incomes and ethics. And we both went to four-year colleges. She is no doubt smarter than me. But I think what really separates us is behaviors. She was disciplined and had a stomach for work. I was undisciplined and had no stomach for work. But maybe my discipline and work ethic would have been better if I chose a more challenging major. “Of all the words of tongue and pen, the saddest are these: it might have been.” Thanks for stopping by Kate. Love the way your wind works. Cheers.
I realized what you were aiming for after I wrote my comment. There definitely are levels of work ethic that change our pathways. I always wonder if I would’ve done a science/chem degree instead of the path I took (always wanted to be a scientist as a kid) what would have changed for my life. Nice comparison.
I have to agree with you with regards to income inequality. I worked hard in school. I was the nerd who got weggies. I also ran track, so I had some cred there, but the nerd part won out most of the time. I also paid for college with a ROTC scholarship.
My older sister was pretty and popular. She did not work hard. She did in college, but then started working a career different from her education. She went to school to be a teacher, but then choose to give it up to do administrative work. To this day I do not know why. She also harassed me for studying and being smart. She mocked me for joining ROTC. There is another side, though. My sister is not mentally gifted. I am. It feels a bit unfair. One year, when she was in 10th grade, and I 7th, we both took the same SAT. She took it for college prep and admission, and I took it as part of a national comparison of kids in gifted programs. I out scored her by nearly 20%.
For whatever reason, she was pretty and popular, and I was nerdy and awkward. She was the better general athlete, but I could always out run her.
People are different. We have different skills and abilities. Ultimately income inequality comes from that fact. At different times and places in life and history, different traits have more value. I had low value in our school days, and her high. I have more value professionally now. Who knows what tomorrow will bring.
A tale of two siblings. I love it! Here’s one for you, though. My brother got the looks, the smarts, the athletic ability, and the drive. Whoever said life was unfair was certainly on to something. Thanks for stopping by, my friend.
I think a lot of inequity has to do with intrinsic motivation. If you’re driven, you’ll probably do pretty well in life. There are many opportunities out there. Of course, it’s harder for some than others, but I still believe we can all make it if we go for it.
Your kitchen is awesome. It’s just the right size. The screened in porch looks great too. It’s coming together really well.
Agreed, Joe. I fail to see how anyone can adopt the tenets of the FI community and not improve his or her position in life. For every “hate crime” in the news, there are a thousand “love legalities” that go unreported. For every example of “systemic racism,” there are a thousand examples of “systemic kindness.” We are a rich country with far more noble people than vile scumbags. In other words, our country is teeming with opportunity, and there’s no excuse for being broke and miserable. Cheers, my friend.
Income inequality is fair in that it reflects your value in the marketplace, but it is unfair in that often the things that cause your marketplace value may not be things you can control. A coordinated 7 foot tall basketball player is a guaranteed millionaire if he puts even slight effort into mastering the game. A clumsy 5’5″ guy is never making money at any sport, ever no matter how hard he works at it(OK, maybe a jockey). I made a lot of money without ever studying hard or working hard because I had a brain that was intuitively great at engineering. I was way better than engineers that studied ten times as hard, because no amount of studying can change the way your brain is wired. Totally not fair that a lazy guy like me made a lot of money when hard workers made less, but totally fair to the market because I delivered tens of millions of dollars in profit to my employers that the hard workers could not produce. So I think it is both very unfair and also kind of fair at the same time? And I love the house, we are in the same house we’ve owned for 40 years and adding a screen porch was our first remodel 36 years ago!
Steveark recently posted…“You Wrote Me a Letter”
Excellent point, Steveark. I would argue, however, that inequality by nature is just because it’s impartial. No bureaucrat steps in to decide which child is given elite height, brains, or looks and which child isn’t. It’s all an accident of birth. And because innate qualities aren’t determined artificially, most people don’t begrudge a 7 foot athletic monster taking advantage of his good fortune.
Groovies, your home is gorgeous! I’m thrilled for you both that it’s finally getting REAL!
Julie recently posted…Generational Graduation
Thank you, Julie. We really appreciate your kind words.
It’s the idea of income equality that should scare people. I mean, if you’re a freaking snowflake, aren’t you saying you are unique? When I first started in Engineering some other women wanted me to join a study to prove women engineers were paid less than the men. I said to count me out and focused on getting good at my job. I got plenty of raises and outcompeted many men at work. They didn’t complain about being paid less than me!
Made my day, Susan. No country is perfect. How could it be when its building blocks are homo sapiens? But our country, for all its faults, remains a very groovy place. And what I like most about it is that talent–over the long haul–still wins out. Your career is a testament to that axiom. Cheers.
Congrats Mr. G, you just me laughing out loud at work. That first part is a gem and I am happy seeing sh*t getting real 😉
[HCF] recently posted…Thanks for your concern Suze, but the FIRE movement is fine
LOL! Hope you didn’t get any looks at work.
You raise a lot of good points here Mr. G. It’s a tough call sometimes though, between inequality that is “just” as you say, vs ill gotten. But I definitely agree with you that if one wants a higher salary, one must do what it takes to attain that. Educate yourself, formally or not. Network and observe how people who hold titles you want conduct themselves. A positive attitude is always helpful.
Side note congrats on the ranch! I’m getting super pumped! If invited I’m more than happy to bring a big batch of homemade whatever you fancy to warm the new home 🙂
the Budget Epicurean recently posted…One Small Thing: Bags
Agreed, BE. We as a society got to do a much better job on the ill-gotten inequality. And you are no doubt going to be invited to Groovy Ranch. Can’t wait to have you and The Boy over. Homemade whatever TBD.
sociology might still get you a sweet 17k starting wage. i jest, of course. i think you’re right about that one comparison and i was on you end of it all. i didn’t finish school right away despite high scores going in. i started working in science on a low level and thought i should have better roles at that time just for being a little brighter. it doesn’t work that way and it was all my fault for not having the same credentials at that time. plus, it helps if you can play the game. there’s no crying about it. you’re willing or not.
freddy smidlap recently posted…Free Sausage Party with Ally Cash Back
“sociology might still get you a sweet 17k starting wage.”
LOL! You’re not too off, my friend.
Mr Groovy:
This post may be hard for some to read but it is absolutely spot on! At my corporate jungle I always say if you want to know what the problem is, first buy a mirror. Chances are you are a part of the problem. Take the initiative to change your behavior and you would be surprised how much better your life becomes.
“This above all: to thine own self be true…” – William Shakespeare (Hamlet).
Be honest with yourself and make the changes needed to propel yourself forward to where you want to be.
Love the posting!
“Be honest with yourself and make the changes needed to propel yourself forward to where you want to be.”
Couldn’t agree more, my friend. As you so eloquently pointed out, the only things separating most people from economic success is a mirror, a healthy dose of introspection, and a determination to substitute good financial habits for piss-poor financial habits.
Preach the truth Groovester!! But seriously, even though I haven’t met you I believe you are more than a well-manicured ape, since you type sensible things on the intertubes. Perhaps a cultured and hipster orangutan? 🙂
More seriously, “equality of outcome” is a dangerous way of thinking that is gaining popularity in our country rapidly. It scares me.
Dave @ Accidental FIRE recently posted…U.S. Median Income Map Animation From 1985 – 2017
A pox on “equality of outcome.” I spit on such Marxist drivel. Besides, in a free country that allows the natural aristocracy to rise, the poor live like kings compared to the rest of the world. Love the cut of your jib, AF. Cheers.