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income inequality

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People are sharing what it was like encountering insanely rich kids for the first time

via rkoi / Instagram

Most people grow up going to schools where people are of a similar social status. Lower-income people tend to grow up with people in the same situation and affluent people usually grow up around people who are rich, as well.

But things can change dramatically in college. People who are from completely different sides of the socioeconomic spectrum attend class together and sometimes wind up sharing the same dorm room.

One student can be there on a scholarship and have a part-time job to make ends meet. The other may be on a massive allowance from their parents who pay full tuition without batting an eye.

What exacerbates the issue is that many people go through college being dirt poor. If they have a job, it's often low-paying, they can't work many hours and they aren't old enough to have accumulated any wealth.

So seeing someone one of your peers wasting other people's hard-earned money can be downright stupefying.

It can also seem highly immoral for some to have so much and not appreciate it when others are struggling to get by.

College is also a time when people begin to learn about income inequality and why it exists.

Freelance journalist Jake Bittle started a fun conversation on Twitter where people shared stories of some of the insanely rich kids they knew in college. Many of the responses came from people who went to the University of Chicago.

Bittle's story started with seeing a girl open her laptop to revel a ton of money in her bank account while they were taking a class on Marxism. The tweet inspired people to share stories of the insanely rich kids they met in college and how some of them were terribly wasteful with their money.

(Jake has since deleted his original tweet.)

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You may have heard $75,000 is the 'magic' income number. Find out the story behind it.

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You may have heard $75,000 is the magic household income for happiness.

But what, exactly, does that mean?

In a landmark study a few years ago, Princeton University researchers Angus Deaton and Daniel Kahneman set out to definitively answer the question of whether money buys happiness. If anyone is equipped to answer that question, it's these two. Both have won the Nobel Prize in economic sciences: Kahneman in 2002 and Deaton just last year in October 2015.

In their study, they analyzed over 450,000 responses from people across America about their annual income and overall happiness to get at the relationship between the two. They broke down their findings using two metrics: emotional well-being and life evaluation.

Emotional well-being is basically how you feel your life is going on a daily basis — your everyday happiness or joy, or, conversely, stress or sadness. ("How are you today?")

GIF from "The Simpsons."

Whereas life evaluation is an overview of your entire life and how you see it going — how pleased you are with where you're at. ("How's life treating you?")


GIF from "Nacho Libre."

Deaton and Kahneman found that low income is associated with low emotional well-being.

Poverty makes it so that misfortunes such as getting sick, divorce, and being alone are felt even more. As income rose, though, emotional well-being rose consistently alongside it.

The thing is, happiness through emotional well-being didn't change too much beyond $75,000. Once that point was reached, people were basically just, "I'm good."

GIF from "Episodes."

In the discussion section of the study, the researchers offer a possible explanation: "Perhaps $75,000 is a threshold beyond which further increasesin income no longer improve individuals' ability to do what mattersmost to their emotional well-being, such as spending time withpeople they like, avoiding pain and disease, and enjoying leisure."

Life evaluation, on the other hand, just kept rising with the income.

So if we're talking about satisfaction, sure, more money leads to more. (I mean, if you make a million bucks a year, you can probably conclude that life is treating you PRETTY GOOD.)

GIF from "30 Rock."

But the thing is, when talking about happiness, what really matters in life are the good times you have with friends and family.

Let me leave you with some food for thought.

The Census shows that in 2014, 63.8% of U.S. households earned less than $75,000. More shocking is that although the average household income historically is right around that $75,000-happiness mark, the median household income is just around $54,000 — which indicates most households in the U.S. fall almost $20,000 short of the magic number.

Now that doesn't necessarily mean that all those households are chronically unhappy, but what it does mean is that a large amount of Americans may not have the level of income necessary to spend time with loved ones, avoid pain and disease, and have enough leisure time.

America is still one of the richest countries in the world, yet so many continue to fight for these basic needs. Maybe it's time we close the gap between so few having so much and so many having so little. In fact, this incredible CEO is already doing his part.

Because if the $75,000 threshold has taught us anything, it's that life shouldn't be about the exorbitant amount of money you could be making. But rather, how happily we could all be living.

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A $6,000 toaster is the most absurdly perfect metaphor for income inequality.

When tax cuts came up during a televised community meeting in Australia, let's just say that things got a little ... toasty.

The controversy started during the May 9 taping of "Q&A," a popular panel discussion show on the country's public broadcasting network, when audience member Duncan Storrar asked an impassioned question about the country's latest tax cuts:

GIFs via AussieNews1/YouTube.

It's a valid concern. And Australian Assistant Treasurer Kelly O'Dwyer, who was one of the panelists, offered a, erm, less-than-valid rebuttal.

O'Dwyer launched into a tried-and-true refrain about trickle-down economics — a theory that's been repeatedly debunked regardless of how much people really really want it to work. But it was the example she used to prove her point that really raised some eyebrows. Referring to a(n imaginary?) small-business owner with a $2 million budget, she said:

GIF via AussieNews1/YouTube.

Yup: SIX. THOUSAND. DOLLAR. TOASTER.

GIF from "The Brave Little Toaster."

Upon hearing this, most Australians thought, "Who the &$%# spends $6,000 on a bloody toaster?!"

All across the country, people were moved by Storrar's speech — and dumbfounded by O'Dwyer's blatant disconnect from the struggling poor and working-class citizens, who the government should actually be listening to.

GIF via Denny's/YouTube.

Our cousins Down Under rallied together and launched a tongue-in-cheek GoFundMe campaign to buy a $6,000 toaster for Duncan Storrar. Within two days, they raised more than 10 times that amount.

That's even more remarkable than the guy who raised $55,000 to make a potato salad. But while the impetus behind this campaign was similarly silly, it was also coming from a place of desperation and discontent with the ever-increasing rate of income inequality that's been spreading across the entire global economy.

Taxes are basically just a mandatory government-run crowdfunding campaign. And while you can argue about that supposed tyranny all you want, the fact that thousands of people willingly gave up their own hard-earned cash to help a man in need speaks volumes about the power of empathy and the far-reaching effects of community support.

GIF from Nicolette Groome/Tumblr.

The fact that governments across the world continue to eviscerate social benefit programs to give tax cuts to the wealthy is a disheartening affront to that same goodwill.

Governments should work for the people — which means all the people, not just the biggest breadwinners. So how come nearly 1 million Americans are losing food benefits while House Republicans are proposing an additional $98 billion in social program cuts? Why are 500,000 people in the U.K. losing their disability benefits, which many of them rely on to survive? Why are people like Australia's own prime minister hiding billions of dollars in potential taxable income in places like Panama and still getting tax cuts when the time comes around?

And how come when thousands of people opened their wallets and said, "This guy deserves a piece of toast! (Or, more accurately, to take his daughter to a movie once a year!)" the Australian government still ignored them?

Put mildly: That's not cool.

Guess which side of this toaster represents the working class? GIF via Photonic Induction/YouTube.

These phenomena obviously aren't limited to Australia. But a $6,000 toaster making front-page headlines is a pretty good indicator of just how absurd the problem really is.

Granted, there are some smaller businesses who would benefit from a six-foot-wide, double-racked toast-making behemoth like this.But what good is a $6,000 industrial toaster if the majority of your potential customers are too poor to afford a sandwich?

Maybe instead of concerning ourselves with fancy electronics, we should make sure everybody has their bread first. After all, you can't make toast without it. And if a couple thousand people were willing to chip in $60K in just two days to make one guy's life a little easier, imagine the difference it would make in the entire community if everyone did their part.

Warren Buffett nailed why poverty in America 'does not make sense.'

While describing the high level of poverty in the U.S. — the richest nation on earth — Warren Buffett used seven simple words to perfectly articulate what many of us have been thinking.

Photo by Scott Olson/Getty Images.

"I mean, that does not make sense."

Buffett — the CEO of Berkshire Hathaway who's given away billions of dollars to charitable causes — got real on America's wealth inequality in an interview with Reuters published Sept. 8, 2015.

Here's that quote in context:

"You expect unequal results in a market economy, very unequal. But you really shouldn't have an economy with over $50,000 in GDP per person and have lots of people living in poverty who are willing to work. I mean, that does not make sense."

You can say that again, Warren.

Despite the U.S. having a GDP that surpasses $54,000 per person, there's certainly no shortage of inequality.

Compared to other developed countries, "low-income Americans get an exceptionally raw deal," as this article by Jordan Weissmann in Slate illustrates. Americans at the bottom of the economic ladder are in significantly worse circumstances than their counterparts in nations like Norway, Germany, and Canada.

But why?

"America's poor are poor by global standards because we've decided to leave them so,"Weissmann wrote, noting the U.S. spends a relatively small amount on helping those in need (like the unemployed or the elderly) compared to other rich countries.

The 1% earns about 20% of the country's income.

In case you've missed the memo, income inequality in the U.S. has gotten a lot worse in recent decades, too.

That infamous 1% we're always hearing about? They rake in about 20% of the country's total earnings — more than double the share they earned in 1981. And when you look at what top American CEOs are making in contrast to their average employees, well, the numbers are downright depressing.

That's right — CEOs at top U.S. companies made roughly 303 times more than what their average worker made in 2014. In 1965, they made just 20 times more. (That roller coaster you see between 2000-2010 reflects the economic instability after 9/11 and the Great Recession.) Graph courtesy of Economic Policy Institute.

Why are the wealthiest getting wealthier at crazily disproportionate rates? There are many ways to approach that question. But Warren Buffett believes it comes down to a system that promotes inequality:

"A lot of the wealth [has flowed] to the top," he argued, noting "we need governmental policies to correct that."

Photo by Bill Pugliano/Getty Images.

I don't know about you, but if poverty in America "does not make sense" to one of the most successful businessmen in the U.S., I think it's time we rethink our ways.

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