Trump is GOP Nominee

Most of this is antecdotal because both my company and many of those we compete with are dealing with activists. But I see all to often headlines taut read - X does y under pressure of investor z. And most of the time I feel like this will be a robber Barron run up to leave the long term guys holding a less valuable entity in the end.

 

that situation is real, but is rarity. The hedge fund guys tend to push that way because their timelines are short, but they aren't cutting up companies as the 80s Chainsaw Al types did. These guys are helping long term value as much as they're hurting it.

 

If we are truly working our way up then the rungs move with them. So to me what you are saying is that 50% of our population is incapable of doing jobs that would be worth more and have actual growth mobility. That seems like a high percentage that we could move down through policy.

 

So the middle class needs to be poorer?

 

Exactly. With the information available now, the situation in the 80s where the break up value of the company is greater than the market value just doesn't happen anymore. My broker dealer was bought by a hedge fund. They didn't lay anyone off, they didn't stop spending money. Exactly the opposite.

 

The drop in middle and lower class went directly to the upper class, so clearly people are moving up the ladder.

 

I assume you mean the instantaneous breakup value vs the value increase in growth potential post-break up. Because there are absolutely investors aimed at breaking up companies.

 

Or get significantly better skilled. Real answer is nothing can be done except get people better educated and skilled

 

The quintiles are population based, right? So if the third quintile is moving up the line goes up, those people just don't jump up to the quintile above them. Unless we're filling in the ring they just left with new bodies.

 

Sometimes companies are more efficient broken up. That doesn't neccesarily hurt the employees. I'm talking about the day where people bought a company sold 50 percent of it and layed everyone off. That just doesn't happen unless said company was already in the shitter.

 

I very much doubt the rich are breeding at a faster rate than the lower and middle class. I'd guess it's actually the opposite.

 

While the above isn't happening that doesn't mean that companies are being left less competitive once the activist leaves.

 

So privilege does exist! If the rich are feeding their children into their quintile...

 

It's possible, but not something that appears to be a big problem. Generally more competive means more money for the employees. See Apple, Google, Facebook, Amazon, etc

 

It's harder to go up than down, but it happens.

 

Probably not the whole picture, but it is probably some of it since the 1960s. Family size is smaller, especially for the middle class. But then again, middle class women are more likely to be employed today, than they would have been, when they were staying home and raising kids. Which would raise income.

 

not in the least. Those rungs should be filled with upwardly mobile young or those who can't move. Those rungs are purely about the pay grade and unrelated to people within them moving. People depart the rungs and that graph doesn't at all account for them. All it accounts for is the pay ranges.

Think about it. Why in real dollars terms would those rungs move? The higher end makes sense because of supply demand issues. The lower end wouldn't move because of exactly the same reasoning.

 

it doesn't need to be anything. Middle class as a definition is just lines on paper. Our middle class isn't poor. It's generally overpaid for the skillset it brings and as the labor pool casts a wider net, it's just flat overpriced. The only way to keep it competitive at its current pricing is to make international labor more expensive, or tax it. It's not unlike any other economic protectionism that protects the price of American goods - a tariff if you will.

We have many structural issues that make our labor pool very expensive relative to the Asian markets. It is what it is. I don't want any of them poorer, but we have to understand that labor is about price vs value of the labor. If it's a purely financial decision, it's very easy. Qualitative matters change it some, but not much.

 

I just don't see how the math would work. What am I missing. If people are leaving a rung and earning more and the average of that quintile isn't moving with them then either it's not happening to a lot in that quintile, they are being replaced by folks falling down from above, or bodies are being added in at an offsetting rate.

 

kind of interesting: