working class

[Wojtek Sokolowski]

At 09:06 AM 7/2/2002 -0700, Brad et al. wrote:
>>At 05:49 PM 6/29/2002 -0700, Joanna wrote:
>>>At 01:14 AM 06/29/2002 -0400, Brad wrote:
>>>>Let me enunciate as gospel the rule-of-thumb that Bob Litan and I
>>>>agreed on: that more than 3 times your current consumption level
>>>>strikes you as absurd and wasteful luxury. The median family income
>>>>in America today is going to be about $54,000 this year. Taking a
>>>>rough guess at the progressiveness of the tax code, you would need an
>>>>income of about $220,000 to get you to the point where, from the
>>>>perspective of the median, you are starting to buy stupid and
>>>>pointless luxuries that nobody really needs... That gets you down to
>>>>2% of families in the upper class.
>>>
>>>This is an honest question: why distinguish on the basis of luxuries? 
>>>Why not distinguish on the basis of whether one has to work for one's 
>>>living or not? In some families, two earners can pull in 220,000 but, 
>>>depending on how extended they are, they could be a month away from the 
>>>sidewalk. Others (who have capital) also have the same income without 
>>>ever having to work a day in their life. Granted, both cases depend upon 
>>>the same economic system, yet it makes more sense to me to put the first 
>>>family in the working class and the second in the capitalist class.
>>>
>>>I am not trained in economics, so please, why not slice it and dice it 
>>>this way?
>
>I think the big issue is, "What is the cost of job loss?" If the 220K 
>working family has an easy time picking up new jobs at near-equivalent 
>wages, it's hard to see why their skill-based wealth is any different from 
>asset wealth. Asset wealth can vanish too. If the cost of job loss is 
>high, however, then I think you're very right...

If I remember correctly, Econ 101 introduces a distinction between wages 
and rents.  Wage is when you are compensated for the market value of  your 
work, rent is when you are compensated for your monopoly position in the 
labor market.  Salary/compensation includes both elements, albeit in 
varying proportions.  Compensation of a cashier at the supermarket is 100% 
market wage - no rent element.  Earning of a corporate celebrity like Chief 
Mickey Mouse Eisner or Bill Micro and Soft Gates are mostly rent.  The 
salary of a university professor is a mixture of the two.

In this conceptualization, consistent with Marx  - working class derives 
its income mostly from market value compensation for the labor power they 
sell, regardless of the amount of that compensation.  An expert technician, 
engineer, architect, or a professional can earn $200-$300 an hour and still 
be considered working class.  A capitalist's remuneration, otoh, is mostly 
rent derived from his/her monopoly/celebrity status.  The border line 
between the two is somewhat vague, as with most things in real life.

wojtek