SEVERE THUNDERSTORM WATCH

Until 10 PM

The National Weather Service in Grand Rapids and northern Indiana issues a SEVERE THUNDERSTORM WATCH for Van Buren, Kalamazoo, Calhoun, Berrien, Cass, St. Joe, and Branch counties until 10 PM.  Damaging wind gusts of 60 mph or greater are the primary concern.  Large hail of 1" in diameter or larger is a close second.  We'll be tracking storm development with Live Doppler Radar throughout your afternoon and evening.  Storm motion is easterly at 30 to 50 mph.  Stay with wwmt.com for the latest weather information!

Breaking Weather Map #1
Breaking Weather Map #2
Breaking Weather Map #3
Breaking Weather Map #4

Looking at Income Inequality

Updated: Friday, May 16, 2014
Looking at Income Inequality story image
KALAMAZOO, Mich. (NEWSCHANNEL 3) - A surprise best-selling French author has stoked the fires of class warfare in the United States with the recent publication of his book "Capital in the 21st Century."

Tonight, in Tom's Corner, our Tom Van Howe says whether the book is right or wrong is irrelevant right now; its publication has people talking.

=====================

The author's name is Thomas Piketty. And his premise is this: unless governments start using heavy taxes to break up large concentrations of wealth, our economy and the world's economy will become increasingly unbalanced, with only a few people inheriting massive fortunes.

And he says the only way to penetrate that socio-economic class would be to marry into it--because good old-fashioned hard work won't get you there.

The book has been pretty much kicked to the dirt by conservatives and hailed by liberals. I'm stuck in the middle because I struggled with economics in college.

But I'm not sure you need  a dollars-and-sense degree to get a sense that things aren't going well--that somehow the game is rigged; that the fix is in.

Take a look. The pay of the typical American worker peaked in 1978 and has been dropping ever since.

Since 2000, the wages of the median male worker across all age brackets has dropped 10 percent after inflation.

Compare that to what has happened to CEO's over that same period of time. According to former Labor Secretary Robert Reich, until about 1980, CEO's were paid, on average, 30 times what their typical worker was earning.

Since then, CEO pay has skyrocketed to roughly 300 times the pay of a typical worker.

Its good to be on top--not so good for those who are not.

And I can hear you say, 'Well, let's not pick on the job creators.'

But I can't find a single economist to say they're creating that many jobs.

What those CEO's are doing instead is taking their millions and investing it. Maybe hoarding it is a better word.

Maybe--just maybe--if they increased the pay of their workers, those same  workers would have more money in their pockets to buy more of the product they're making.

Kind of like Henry Ford, who doubled the pay of his workers to five dollars a day, so they'd be able to afford their own cars.

That would seem to be a good thing for the economy.

If a company can sell more of what is has to sell, it has reason to expand and hire more people. So customers are really the job creators.

Absent that, however, what do we do to level the paying field?

The french economist Piketty says we ought to start by taxing the hell out of the wealthy and then redistribute all that money to balance the scales.

But--to be real--that doesn't seem likely.

After all, our lawmakers, who rely on the monied classes for their political survival, aren't going to start gnawing on the hands that feed them. Can't see that happening next week.

How about the return of labor unions? To sit down and negotiate wages and benefits.

Well, unions are out of vogue right now, and while we do have the right to collectively bargain in this country, why don't you try organizing a union chapter where you work and see where that gets you.

The best idea I've heard so far is in a bill coming up for consideration in California.

It called Senate Bill 1372, and would set corporate tax rates according to the ratio of CEO pay to that of a typical worker.

The higher the ratio, the higher the tax. The lower the ratio the lower the tax.

All of a sudden, board members at 'Corporation A,' who set CEO pay, would have to start answering to stock holders who'd suddenly have a different set of questions.

I don't know if the Frenchman's book about capitalism is on target or not, but it has, indeed, set people to talking.

The elephant has left the building and we're talking about class warfare in this country as if it were a real thing.

And that's good--because it is.

In this corner...I'm Tom Van Howe.

Business News

Last Update on September 19, 2014 17:24 GMT

ALIBABA-IPO

NEW YORK (AP) -- Alibaba's stock is surging as the Chinese e-commerce powerhouse begins its first day trading as a public company.

The stock opened at $92.70 on the New York Stock Exchange this morning, up 36 percent from the initial $68 per share price set Thursday evening.

At that price the company would be worth $228.5 billion, more than companies such as Amazon, Ebay and even Facebook.

On Thursday, Alibaba and the investment bankers arranging the IPO settled on a price of $68 per share. The company and its early investors raised $21.8 billion in the offering, which valued Alibaba at $168 billion in one of the world's biggest ever initial public offerings.

But after a two-hour trading delay due to strong demand, it opened much higher than that price. If the stock closes at $92.70, the IPO will have raised close to $30 billion.

LEADING INDICATORS

WASHINGTON (AP) -- A gauge designed to predict the economy's future health rose in August but at a much slower pace than in July.

The Conference Board says its index of leading indicators rose 0.2 percent in August, the seventh straight increase. But that was much slower than the revised 1.1 percent gain in July.

Conference Board economist Ken Goldstein says even with the slowdown in August, the index shows the economy is still gaining traction.

STATE UNEMPLOYMENT

WASHINGTON (AP) -- Unemployment rates rose in nearly half of U.S. states in August, even as employers in two-thirds of the states added jobs.

The Labor Department says unemployment increased in 24 states, fell in 15 and was unchanged in 11. Hiring picked up in 35 states, while it fell in 15.

Unemployment rates can rise even when hiring increases if more people start looking for work and don't immediately find jobs. The figures suggest hiring was broad-based across most regions of the country last month, even as nationwide job gains in August were the weakest this year.

Georgia reported the nation's highest unemployment rate, at 8.1 percent, followed by Mississippi at 7.9 percent. That's the first time Georgia has had the highest rate since the Great Recession ended.

BRITAIN-SCOTLAND-ECONOMY

LONDON (AP) -- Businesses and investors have reacted with relief to Scotland's decision to reject independence from the United Kingdom.

The No campaign won 55 percent of the votes cast in Thursday's referendum. The 10-point victory margin was wider than expected -- most opinion polls on the eve of the vote showed a narrower 4-point victory.

British stocks responded positively to the news Friday, with the FTSE 100 index up 0.3 percent. Royal Bank of Scotland shares were up, and the bank, which is majority-owned by the U.K. government, said it was "business as usual" for its customers.

Some had warned that if Scotland left, uncertainty over the future value of the British pound and government debt would have rattled the U.K economy.

In the currency markets, the pound was solid too, rising to a two-year high against the euro.

EXXON-RUSSIA DRILLING

IRVING, Texas (AP) -- Exxon Mobil says it will stop drilling an exploratory well in Russia's Kara Sea in compliance with U.S. sanctions against Russia over Russia's involvement in the Ukraine.

Exxon planned to drill the well between August and October. The latest round of sanctions called for the removal of U.S. workers on projects in the Russian Arctic by Sept. 26.

Exxon says it has received a license from the U.S. Treasury Department to wind down operations, but it is unclear whether the license will allow Exxon to stop drilling on the schedule it had already laid out. Exxon could not be immediately reached for comment.

PABST BREWING-SALE

NEW YORK (AP) -- The maker of Pabst Blue Ribbon beer is being sold to Russian company Oasis Beverages for an undisclosed sum.

In addition to its namesake beer, Pabst Brewing Co. makes Colt 45, Old Milwaukee and Schlitz. Pabst was acquired in 2010 by C. Dean Metropoulos & Co., which is known for investing in food brands.

Pabst Brewing, now based in Los Angeles, traces its roots back to 1844 in Milwaukee. Since purchasing it in 2010, Metropoulos has enlisted comedian Will Ferrell to market the company's beers. Pabst Blue Ribbon has also grown in popularity in part for its blue-collar appeal and cheap price.

Oasis is buying Pabst with TSG, an investment firm known for its work with consumer products companies. TSG Consumer Partners will take a minority stake in Pabst.

advertisement
Washington Times
advertisement