No only that, but I have to question the whole premise: desirable to whom, why would anyone want me to work longer hours? I certainly don’t want to work more hours, nor do I care whether you work longer or shorter hours. What is this all about?

We had much greater income and GDP growth when there was much greater equality. For an explanation why, please see my posts:

http://richardhserlin.blogspot.com/2008/08/dollar-spent-on-tax-cuts-costs-more.html

and

http://richardhserlin.blogspot.com/2008/08/more-on-tax-cuts-pun-intended.html

To whet your appetite, here’s part of the reason why:

Finally, what about Republican claims that tax cuts will make people work more hours because it increases their pay per hour? First, people today, by and large, work so hard, and spend so little time with their families by historical standards and compared to people in other countries, that it’s not at all clear that this is desirable, and it’s not even physically possible to work many more hours at this point. In addition, there is a point where production is decreased from more hours, because eventually it really hurts the quality of work. People become tired and burnt out. Competence and creativity is hurt. But aside from any of this, it has been shown in economics that in fact there is little long term relationship between tax rates and work hours. For most of the 20th century real wages per hour went up greatly at the same time that hours worked dropped. There’s little long term effect, and what effect there is can easily go in the other direction. Cutting taxes can decrease work hours. A key reason is the long ago established and accepted in economics, income and substitution effects, which you can find in any university microeconomics text.

The idea is this: if you raise someone’s wage from $8/hour to $12, they may go from 40 hours/week to 45, because they get $4 more for giving up an hour; that’s the substitution effect. But if you raise their wage from $8/hour to $1 million/hour, they will probably work like 40 hours per year! And then spend the rest of the year enjoying all of that money. That’s the income effect. When you raise someone’s wage per hour, they don’t have to work as many hours to live in a way that they consider well. Empirically, it appears that with taxes at about their current level, the income effect becomes greater at about the middle class level, and then we get what’s called a backward bend to the labor supply curve. Cornell economist Robert Frank has a nice brief New York Times Economics Scene article explaining all of this, “In the Real World of Work and Wages, Trickle-Down Theories Don’t Hold Up” (at: http://www.nytimes.com/2007/04/12/business/12scene.html?ex=1334030400&en=a58a714793b92179&ei=5124&partner=permalink&exprod=permalink).

Let’s say that you have a 20 year old woman who arrived from mexico in 1988 and immediately had a son. Now, if that son currently worked in Mexico his income might be a couple thousand dollars, but it is now ten or more thousand. Additionally, if you are operating under the premise that this new worker is replacing a retiring white worker you’re forced to look into whether or not you are replacing like with like. And you’re not. The average IQ of ethnic mestizos, who account for nearly all immigration from Mexico, is around 88, while the average IQ of currently retiring workers is roughly 100. You can’t replace a 100 IQ with an 88 IQ and expect similar results.

This just demonstrates that if you’re looking at aggregate data over an extended period of time you really need to be careful that you’re measuring the same thing. An analogy might be measuring the height distribution of the Roman Senate during the late empire, a period of time when the Empire completely lost it’s Roman flavor and turned completely multi-ethnic; the Romans were shorter than the Germans.

I don’t think so. This commenter said:

A marginal income tax of 75% on the top would just mean that the top earners would devote their time to tax avoidance rather than engage in wealth building activities.

See? They don’t even understand their own prophet and desecrate her name. Sad, very sad.

These extremely greedy people who really-really need to be making tens of millions of dollars every year, these freaks – I’d strongly prefer that they become criminals, bank robbers – rather than captains of industry.

We really need some kind of global “people power” movement here.

It’s unfortunate that people think that income equality would raise the poor up when in reality, it often just drags the rich down.

A marginal income tax of 75% on the top would just mean that the top earners would devote their time to tax avoidance rather than engage in wealth building activities.

The cons of wealth equality are so much greater than the anticipated benefits.

Also, the top tax rate has to go much higher than 75% and permanently – it can be argued that this whole thing started when the Kennedy/Johnson admins dropped the top rate from 91% to 70%.

Also, a wealth tax would be a very good idea at this point.

*******************************
How to legislatively (re)impose a fair and balanced American labor market:
First, double the minimum wage to $13/hr over three years (a dollar every six months?) – and – legally guarantee inflation adjustments for incomes under $100,000.

Doubling the minimum wage could potentially add an average 50% more pay to below 50 percentile earnings ($13/hr being today’s 35 percentile wage) – accompanied by only (an easily computed) 3%* direct price increases plus perhaps (?) 3% more after other wages are pushed up – a minimum wage-force multiplier.

Next, legislatively introduce French-Canadian style (lite) sector-wide labor agreements to the US labor market (airline and supermarket employees would kill for sector-wide contracts) – and – legally mandate union certification and re-certification elections (every four years?) at every work place (periodic re-certification could clean up the most common objections to unions: entrenched, complacent or even corrupt leaderships).

Top 10 percentile incomes enjoy 40 percent of the take these days (up from 27.5% in 1973) – plenty of headroom there for the mid 50-90 percentile to rake back more missing share points through higher labor prices – a collective bargaining-force multiplier.

Finally, (at least temporarily?) hike marginal tax rates (75% over $500,000, $1,000,000?). Folks earning 2500% more than folks doing the same work 25-35 years ago will not return all the way to earth through 12.5-25% price increases – erode a force multiplier.

America’s lower 90 percentile earners never think to impose legislative hegemony to recoup the 12.5%** income share they have lost to top 3 percentile since 1973 – their unemployed force multiplier.

• http://ontodayspagelinks.blogspot.com/2008/08/3-cost-of-gdp-output-and-inflation.html

** http://ontodayspagelinks.blogspot.com/2008/08/income-share.html

It was the trained incapacity of economic professionals, who have been indoctrinated to take a deliberately incomplete model of human society as complete, which caused Krugman and DeLong to stand around sucking their fingers and talking about a paradox. And they’re the good guys.

Back in the late 70’s real estate started getting more expensive and women had to work in order for a family to be able to afford a house. Household income went up because more people were working. Eventually productivity rose, due at least in part to increasing computer use, GDP rose, and working people didn’t get to share because, among other things, we had Republicans in power to make sure that the wealthiest got to skim the cream.