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Do the rich work harder?

By Judy Martel · Bankrate.com
Wednesday, January 29, 2014
Posted: 6 am ET

America has always been viewed as the land of opportunity, where hard work can result in financial success. While a new survey by Pew Research Center reveals that 60 percent of Americans still believe in that, the same percentage says the economic system is unfairly set up to favor the rich.

Click on the image to see average household incomes in 2012.

Click on the image to see average household incomes in 2012.

Only 38 percent of respondents believe being rich is the result of working harder than others, and half say people are poor because of circumstances beyond their control.

In addition, the growing gap between rich and poor, a topic recently debated and discussed by President Obama, Pope Francis and delegates at the World Economic Forum in Davos, Switzerland, is not unnoticed by most Americans.

Nearly two-thirds, or 65 percent, of respondents believe the gap between the rich and everyone else has widened over the past 10 years. Bankrate examined data and found that, in fact, the income gap has been growing over the past 20 years. Read Bankrate's analysis of the widening income gap in the U.S.

How to reduce the income gap?

Overall, 54 percent of survey respondents say that the most effective way to reduce the income gap is to raise taxes on the wealthy and corporations and spend the money on programs for the poor. Thirty-five percent of respondents say lowering taxes on the wealthy is a more effective approach because it will encourage economic growth and investment.

The survey highlights the fact that while both Republicans and Democrats share the opinion that the income gap is growing, the difference between the two political parties is in how they believe it should be handled. Among Democrats, 90 percent think the government should do "a lot" or "some" to reduce the gap, while only 45 percent of Republicans think that.

The two parties also differ on the effect of government assistance on recipients. Among Democrats, 66 percent think poor people need government assistance in order to meet their basic needs so they can climb out of poverty. On the flip side, 65 percent of Republicans believe assistance programs result in recipients being too dependent on government aid.

Another hot political potato in the income gap discussions has been the debate over the minimum wage. As part of his plan to reduce income disparities, President Obama has championed an increase in the federal minimum wage. The survey shows most Americans agree with him, with 73 percent in favor of an increase from the current $7.25 an hour to $10.10 an hour.

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28 Comments
Phil C
January 30, 2014 at 9:06 am

The fastest growing sector in America even in the depths of a protracted recession is the government. The richest county in America is Fairfax county, Va (Washington, DC suburb). This is incongruent with historical wealth producing norms. Smaller government (lower taxes) equals larger private sector (more jobs). Private sector produces and Public sector (government) abuses (regulates). Private sector invests and Public sector squanders. Don't give me the tired old argument that Public sector builds infrastructure (you didn't build that). Private sector builds infrastructure (with or without Government). Government gives you price over-runs and bridges to nowhere. Private sector encourages risk and innovation, Public sector picks winners and losers (crony capitalism). Private sector is equal opportunity, Government is equal outcome (wealth redistribution). I thought I saw John Galt the other day. He looked anxious, tentative, like he was about to do something precariously risky yet exciting. I hope for the sake of the country that it is something productive.

S
January 30, 2014 at 7:11 am

The solution may be a maximum wage rather than raising the minimum. Not in hard dollars but as a percentage of the lowest paid employee (including the jobs outsourced overseas) - say maximum 10 times the lowest pay. The company is free to either reinvest profits into the growth of the company or equitable raises for all employees. The calculation should be based on total compensation including all benefits. This would mean that the CEO of a company (presumably the highest paid employee) with NO overseas employees could make no more than $150,800 including benefits if the lowest paid employee was paid minimum wage with NO benefits. Even a limit of 100 times might be more equitable than the current scenario.

tom
January 30, 2014 at 6:54 am

Does anyone other than Obama really believe you can solve the income inequality problem by splitting the pie into smaller pieces?

GROW THE PIE and people who are willing to improve themselves and work hard will grab a larger slice. It has always worked that way. Economic growth and the opportunity it presents is what really gives people the chance to lift themselves out of their present circumstances.

The current regime believe they can "regulate" our economy and world into a more prosperous position and "redistribute" the pie. How has that worked so far? How did it work for FDR? We fed some people but it took a world war and ramping up the factories to produce for that war to lift us out of an economic funk and many think that funk was prolonged by FDR's policies implemented to help.

David Ward
January 30, 2014 at 3:52 am

It seems to me that a good many--well over 50 percent--of Americans believe (and rightly so) that hard work doesn't translate into "the American Dream" anymore, much less prosperity. Instead, debt spending is the only way by which many, perhaps, can "live the dream," and that's just a pipedream, since bankruptcy is always just around the corner.

Notwithstanding the relatively few examples throughout American history, the "rags to riches" story is a thing of the past. Maybe it was, all along, more of a goal to try to attain rather that an attainable goal. Perhaps? Raising the minimum wage is a must, a good start if you like, and any serious thinker worth his or her salt has to concur on this one.

Slaving Sam
January 30, 2014 at 2:11 am

One way to close the gap would be to take all the rich people who are responsible for sending jobs overseas and throw them in prison, while stripping them of their wealth. Anyone who ships jobs overseas deserves the death penalty - no exceptions. These "people" are the most unpatriotic people on the face of the earth. Punish them! And then bring the jobs back here. That will create a whole lot of jobs in the USA. Strip the wealth of the scum that sends jobs overseas, and use it to repair infrastructure, and that also will create more jobs which in turn, creates more tax dollars without raising taxes.

Douglas Fitch
January 30, 2014 at 1:17 am

It is the rich that build the economy and nation. Picture our nation like a one hundred car freight train. The rich is the locomotive. The rich and the corporations supply the jobs. When the Government fondles with them, they move their affairs overseas-that costs jobs. And many of the rich are philanthropists.
Men like Bill Gates, Warren Buffet, Steve Jobs and Michael Dell saw opportunities and found ways to take advantage of them. Equation- Opportunity+hard work+some luck=success.
Men like Henry Ford, Ray Kroc and Sam Walten built empires that create jobs.
So Kudos to the rich.
This is from someone who works for a salary less than 25k a year

joefd1
January 30, 2014 at 1:09 am

The question isn't, is a person making 100k/year working harder than a person making 12k/year . the question is , is the person returning or producing a product worth 100k for his wages .To put it a little differently can his boss show a profit after paying this guy . The object it a profit . if we pay a person 15k a year to do nothing this country will certainly go down the tubes. we used pay our workers piece rate , produce or go home . If you work harder make more . However that is almost gone except in certain middle east and third world countries . Nothing is free , or there is no free lunch, someone must pay .

ironman01
January 30, 2014 at 1:07 am

unionize the workforce, collective bargaining would eat up some of that gap. yet a lot of politicians want to take that right away from us. wonder who there working for?

Janice Ma
January 30, 2014 at 12:17 am

Of course programs to help the poor will help even the gap. They will also help the economy because every penny the poor receive they HAVE to spend. Every penny that is put back into the economy helps to create new jobs. Every dollar that is taken OUT of the economy HURTS the economy. The rich putting so much money into offshore accounts hurts more than anything!

good2go
January 29, 2014 at 11:41 pm

I don't think most of the rich work any harder either physically or mentally than anyone else. Some of it has to do with hard work, some of it with dumb luck. Even if they did, how can you justify paying someone $10M a year vs $100k a year. At that level, does a person that makes $10M really work 100 times harder than the person that makes $100k a year? Or for that matter, someone that makes $100k vs someone that makes $10k.

On the flip side, I am wondering if increasing the minimum wage is really to help lower income people pay more for Obamacare? Is having to pay for a portion of the required health requirements causing the poor to have less money for other essential needs?

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