The Wealth Gap Widens...

God Bless Income Disparity!

Dennis Gartman gave a blistering defense of income inequality in this week's Gartman Letter (via Neil Hume on FT Alphaville).

The economist describes an encounter in Toronto when a reporter asked him a "left of center" question about inequality. Gartman says his answer "caught the reporter wholly off guard," for he didn't give the standard, political response. Here's what he said instead:

We celebrate income disparity and we applaud the growing margins between the bottom 20% of American society and the upper 20% for it is evidence of what has made America a great country. It is the chance to have a huge income… to make something of one’s self; to begin a business and become a millionaire legally and on one’s own that separates the US from most other nations of the world. Do we feel bad for the growing gap between the rich and the poor in the U.S.? Of course not; we celebrate it, for we were poor once and we are reasonably wealthy now. We did it on our own, by the sheer dint of will, tenacity, street smarts and the like. That is why immigrants come to the U.S.: to join the disparate income earners at the upper levels of society and to leave poverty behind. Income inequality? Give us a break. God bless income disparity and those who have succeeded, and shame upon the OWS crowd who take us to task for our success and wallow in their own failure. Income disparity? Feh! What we despise is government that imposes rules that prohibit or make it difficult to make even more money; to employ even more people; to give even more sums to the charities of our choice. That is what we despise… oh, and next question please.

Read more: DENNIS GARTMAN: 'God Bless Income Disparity'

Good for him. They say the best defense is a good offense, and it always helps if you can have a shard of truth in your argument. I just hope his convictions are as strong when the poor begin dragging the rich from their homes and lynching them because accumulating a great deal of their wealth had nothing to do with "We did it on our own, by the sheer dint of will, tenacity, street smarts and the like", but more with insider trading, backroom deals, payoffs, graft, politicians in pockets, usurious interest rates and fees and unscrupulous business practices.

If an employee has the skills and qualifications and experience to demand more money I'm all for it. However, just getting a college degree and only having a sheet of paper to your name and no real world experience makes the sheet of paper only worth a sheet of paper. College only teaches a person old information on stuff that has already happened, not what's currently happening. Just because someone has a college degree does not mean that they can "expect" to earn a certain income.

The sound you hear is all college administrators, treasurers and parents of college students collectively having a stroke.

Great, so when the professor teaches a kid from a book that was published 6 months ago, from an author that wrote it 6 months prior to that, from information the author has been collecting for 6-12 months prior to that, that they are being fed what is going on NOW and what the latest trends are NOW.

There are lots of self-made millionaires that don't have more than a High School degree. Tell Bill Gates, Paul Allen, Dave Thomas, Jim *****, Steve Jobs, Paul Engler, and countless millionaires that they need to go get a college degree to start a successful company.

I'm a realist. I believe that you have to work hard, make sacrifices, AND pay your dues, get experience and work your way up to be successful. I also totally believe in the idea, that you get exactly what you pay for also when it comes to employers and employees. Last time I checked, I don't know of any successful Captain's (for example) and I know lots of Captains, that didn't start out scrubbing boats as a mate or deckhand before they were experienced enough to move up. The Captain's I know that BS'ed their experience and got their Captain's license, got exactly what the sheet of paper is worth and weeded out of the industry.

I know of guys with a Bachelor's in finance, that cannot even manage their own personal finances, let alone someone else's or a companies. And, I know people with no degree that manage billion dollar portfolio's. It's the person behind the degree (or no degree) that makes the job, not the degree behind the person. A guy's either got it, or he doesn't..............

Cap, you're singing my song. Personally I've found that college grads don't know how to work. However today, without a college degree, you don't get through the door for an interview except at McDonalds. Since it's demanded, it must be paid for. You can't expect someone to give up 4 years during which they could have been earning money, pay give or take $100K, to make the same thing a kid coming out of High School makes. Of course if they majored in basket weaving that's a whole different story.

But you're contradicting yourself. You're saying that you need a degree to get your foot in the door to get a job, but at the same time you're saying you're only getting paid what a kid out of high school makes. If you look at statistics, on average college graduates are still making quite a bit more than non college graduates. The problem is that most jobs requiring a college degree, you knot the suit and tie jobs, aren't producing anything, they're jobs that are managing other peoples money, or supervising production, or selling mortgages, insurance. Since there are less customers around with money or spending money, there are less jobs for them.

However, there are still many good paying jobs that require no degree. And, if you figure the amount of money made in those 4 years working on your career instead of at college, it might be wise for some. Some of those jobs can be chefs, Captains, auto salesman, pilots, salesman in general, heavy machinery operators, cdl's, mechanics, boat/ship repairs, retail store managers, business owners, yacht sales, real estate sales. I know a lot of people that fall into these categories that are not only making more than most college grads, but have also made themselves a millionaire doing so. It all boils down to the person, their intelligence, work ethic, DRIVE (which a lot of these college kids lack), and willingness to adapt and learn new things.

I have a personal opinion of reality and how things should be, but I deal how the world chooses things to be. A few years ago a cop needed a H.S. diploma. Now many require college, same with utilities and most office positions. Even most branches of the military require at least a H.S. diploma. That's a trend that's not going away. When I started in this business you either went to the merchants, the C.G. or you worked your way up from yard worker. Today it's all schools. All you have to do is look at the posts on YF. People who have never even seen the ocean are heading across the country or across the world (spending serious money) to go to schools so they can have a career on the water. When an owner (most likely with an MBA) looks at 2 CVs, one kid says he's been wroking in a boat yard or on a fishing boat and another who says he's got college and been to this sea school or that, who gets interviewed? I know which I'd rather have next to me, but I'm not the one hiring.

That is simply not true.

Really, for jobs where you can make over 40K? Please expand, and are you referring to this industry (because this industry does value sweat more than most) or the job market in general?

Of course I am talking about this industry, this is a yachting forum.

You very clearly implied that the applicant with any degree and some level of formal nautical training will get job preference over someone who has a long history in the industry.

As one who analyzes those CVs and decides which file they go into I can tell you that your belief is false. It is simply untrue.

And with reference to your statement: "All you have to do is look at the posts on YF. People who have never even seen the ocean are heading across the country or across the world (spending serious money) to go to schools so they can have a career on the water."

The work those people are seeking is on large yachts, charter yachts for the most part that operate in the Caribbean in the winter and the Med in the summer. To work on those boats requires a suite of basic safety training (BST)courses that are collectively (and not really accurately) referred to as STCW. Depending on the size of the boat, the safe manning certificate requires deckhands and others to hold certain certificates. This is a far different industry than the Long Island fishing charter boat business. They must have those courses or they will not even get a day on the water. That isn't owner prejudice, it is international law.

No. Not someone with a long history in the industry. We're talking about entry level. I grew up around boats (not documented time) and spent a year working in a boat yard (honing my skills, but on paper it's just a year working in a boat yard). The other applicant has a college degree and went to one of the sea schools. In fact let's make it more even. Both grew up around boats (not documented time)

All other things being equal, I will go for the person with formal nautical training or a degree in anything, in that order.

I don't know why you guys have a bias against someone holding a degree. Going to college means that a person has had to learn social skills, has been exposed to widely varying ideas and norms, and generally speaking, has learned how to learn.

If someone wants to make a career in a regulated industry but hasn't learned enough about it to document the requirements to advance then they have crippled themselves.

There are enough people who have researched the industry to know what is required to perform and advance, and have taken it on themselves to get the training and education to advance, that we don't need to take chances on unknowns or those who can't bring documented skills to the table.

Agreed. My bias is only as it applies to the jobs I need done, not throughout the job market. Hard knocks teaches a person how to work. The question was why a person needs or should expect to be paid more because they have a degree. My point was that he has invested 2 or 4 or 6 years and possibly tens or hundreds of thousands of dollars with the expectation of earning enough to pay back the loans and profit. Capt.J felt he was just getting old knowledge from schools, useless to the job market. I intentionally left of what you brought up, knowing someone else would point it out. "college means that a person has had to learn social skills, has been exposed to widely varying ideas and norms, and generally speaking, has learned how to learn."

degree

I am glad to be in the 1% that some seem to like to knock.

I am also glad to have a masters in Marine Engineering and Naval Architecture.

I am also glad to have alot of hands on experience in Engineering and building boats.

...but mostly I am glad to give back and try & teach others who would like to get on or into our world a little help.

Unfortunately to advance in management a degree or an equivelant level of achievement is required.

Here's fuel for both your arguments.

Jobs for people with only a high school diploma still exist, but they're disappearing fast.

The Center on Education and the Workforce at Georgetown University studied the likelihood that workers without a college degree will still be able to find employment in the future.

The report studied data about job opportunities and skill requirements through 2018 for 16 career fields.

It used $35,000 as a livable wage baseline and compared unskilled workers, those with no college education, to middle skills workers, those with at least some college education.

Among the report's findings: Women will need to have a college degree just to make as much as men with high school diplomas and job growth for people without college degrees has fallen 72 percent since 1973.

See the numbers here: CHARTS: It's Nearly Impossible To Make A Livable Wage Without A College Education

Nice, and refreshing to hear. Nothing wrong with doing well nor enjoying it, It's how you do it and what you do with it that matters.

Today I believe the minimum wage is $7.25 or $15,080 per year. That's also less than half what that study considers a "livable wage baseline". That's up from $5.15 in 1973. How have top salaries changed during that 38 years? So unless you want to be poverty stricken, you basically must spend 4 years in college and take on a debt of $109,172* to attain the "livable wage baseline", and we discussed the math of that back in P66. You're still going to end up poverty stricken.


*Bloomberg