Too much wealth can make us worse off: study

[FarCenter]

By Jamie Doward - 4:00 AM Monday Mar 15, 2010 Facebook

As people seek more status symbols they have less time or inclination to help others. Photo / Carolyn RobertsonNational belt-tightening could be of more benefit to a country's sense of wellbeing than soaring wealth levels, a study has found.

Complex economic formulas developed by two Canadian professors of economics, Curtis Eaton and Mukesh Eswaran, and published in the Economic Journal, suggest that too much affluence can seriously damage a nation's health.

Using mathematical modelling, the economists advance the theory that once a country reaches a reasonable standard of living there is little further benefit to be had from increasing the wealth of its population. Indeed, it could make people feel worse off.

They believe their work shows that as a nation becomes wealthier, consumption shifts increasingly to buying status symbols with no intrinsic value - such as lavish jewellery, designer clothes and luxury cars.

But they warn: "These goods represent a 'zero-sum game' for society. They satisfy the owners, making them appear wealthy, but everyone else is left feeling worse off."

<SNIP>http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10632032

[PDJane]

1. A shared economic level.......

no one too rich, and no one too poor, is an indicator of a society's health.

[HeresyLives]

2. No it's an indicator of mediocrity and no ambition.

[Salviati]

5. No, it's an indicator of compassion for others, and a rejection of soulless consumerism

One can ambitiously strive for excellence without the need for gaudy status symbols and material trinkets. Knowing when enough is enough is a sign of strong self worth and will more likely lead to true happiness than throwing money and effort away in a never ending chase for the newest and shiniest status symbol.

[HeresyLives]

8. That and a $2 bill will get you a cup of coffee.

[L0oniX]

3. Plus ...money can make you sick...

[Fla_Democrat]

4. I'll take the hit

Any excess wealth floating around, making people feel bad.. just send it this way. Call it a humanitarian act on my part. :evilgrin:

[NYC_SKP]

6. Share the Misery. n/t

[RainDog]

7. I don't think it's unreasonable to ask for compliance from corps or to enforce it

to set the rate of worker to ceo compensation to a more reasonable ratio. I don't see why CEO's can't get by on, say, 30 times the compensation of their lowest paid workers.

this would go a long way toward addressing the imbalances of the last 2 decades. whether intended or not, the hugh ratio differences do not bode well for a healthy middle and lower class.

wages have not keep up with compensation for the top ranks. not to mention benefits.


In 2005, the average CEO in the United States earned 262 times the pay of the average worker, the second-highest level of this ratio in the 40 years for which there are data. In 2005, a CEO earned more in one workday (there are 260 in a year) than an average worker earned in 52 weeks.

The 1980s, 1990s, and 2000s have been prosperous times for top U.S. executives, especially relative to other wage earners. This can be seen by examining the increased divergence between CEO pay and an average worker’s pay over time, as shown in Figure A. In 1965, U.S. CEOs in major companies earned 24 times more than an average worker; this ratio grew to 35 in 1978 and to 71 in 1989. The ratio surged in the 1990s and hit 300 at the end of the recovery in 2000. The fall in the stock market reduced CEO stock-related pay (e.g., options) causing CEO pay to moderate to 143 times that of an average worker in 2002. Since then, however, CEO pay has exploded and by 2005 the average CEO was paid $10,982,000 a year, or 262 times that of an average worker ($41,861).

http://www.epi.org/economic_snapshots/entry/webfeatures_snapshots_20060621/

[Fire_Medic_Dave]

9. Seems to me like somebody wrote that down a long time ago.