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Friday, November 23, 2007

Standing up for the downtrodden who only make $160,000/year

Matt Stoller objects to a silly New York Times article. He particularly objects to this passage

But while some of these benefits take the form of highly practical solutions - like on-site child care - others raise questions whether law firms are subsidizing a cushy lifestyle.

"As if a $160,000 starting salary wasn't enough for associates" fresh out of law school, "yes, there's more," said Peter Johnson of Law Practice Consultants in Boston.

As Atrios notes, employers providing pay and benefits to employees are not subsidizing, whether or not there are contracts requiring them to provide such benefits.

However, Stoller has a very odd interpretation of the ideology behind the article
asking "Why Does the New York Times Hate Wage Earners?" in the title of the post and concluding

It's the pain caucus, always, brought to you by the DC Villagers, and it's a subtle propagandizing force that says there are billionaires, power players, and celebrities, and then there is the vast useless consumer horde that should just take what they get and like it.

Stoller presents no evidence supporting his conclusion that NY Times reporter LYNNLEY BROWNING thinks that law associates' excessively cushy lifestyle is being financed at the expense of the legitimate rights of the partners who decided to finance it. I would tend rather to suspect that Browning thinks the lifestyle is unfairly cushy compared to Browning's life style.

The article provides no hint whatsoever of concern for the poor partners. To a considerable extent it seems to me to be celebrating the new perks as a sign that young "top-notch" lawyers want a life and not just a lot of money. The complaints seem to me to be of the form of people saying that young hot shot lawyers are too privileged compared to normal people.

The article strikes me as being populist, noting the extreme advantages some people get from the normal operation of the market system. It makes me think that maybe these high income people can afford to pay more in taxes. Of course everything makes me think that.

The truly strange thing is that Stoller contrasts wage earners (meaning salary earners too) and the power elite. Uh Matt, CEOs have salaries too. So do pundits.

Matt Stoller, why don't you check out Emanuel Saez's home page, click on (TABLES AND FIGURES UPDATED TO 2005 in Excel format, October 2007) (4 lines under the heading "income and wealth inequality") and look at figure 4.

You will find the estimate that about 37% of the income of the richest 0.01 % in 2005 is "wage income" (Picketty and Saez's term). Entrepreneurial income (like partners' shares) is about 37% and capital income 27%. In 2000 the 60% of the income of the richest 0.01% was "wage income". The share of "wage income" is, of course, higher for the suffering masses who are in the top top 0.1% but not the top 0.01 %.

Stoller seems to be imagining things are as they were in 1929 when the vast majority of the income of the super rich was capital income.

The set of "wage earners" is no longer a subset of "non obscenely wealthy people."
The poor 25 year old associates trying to repay student loans and survive on $ 160,000 a year are not super rich, but thinking something should be done to help others share their good fortune is populism not anti-populism as Stoller imagines.

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