Concerning yesterday’s letter (“Who’s winning? Follow the numbers,” Nov. 17), let us compare apples to apples. The letter confused the cumulative interest rate with the compound interest rate. Using its numbers for starting and ending values, for a $1,000 investment to reach a value of $33,563 requires an interest rate of 7.13% compounded annually. Likewise labor’s increase in annual reward has been 3.70% compounded annually. But that is an apples and oranges comparison.

Looking at the same numbers another way, and ignoring inflation, capital’s total increase in wealth by investing that $1,000 over those 50 years was $32,563. (If capital had invested the same amount as the working person’s one year earnings 50 years ago, they would now have $372,920.) In those same 50 years, a person who earned $11,120 in 1972 has received $1,685,134 in total compensation if they are still working today. Again, apples and oranges.

I make no argument that capital has not benefited more than labor over the last 50 years. The real measure is the distribution of wealth. Here in the U.S. the top 10% own 68% of the wealth. The middle 40% of us own 29%, and the bottom 50% of us own just 3.2% of the total wealth. Money makes money.

So, if you have money to lend you get more of it. How much you get is a decision we make as a society. It is also a reflection of how we value each other. Right now, I would say some us don’t value each other very much at all.

Robert Sessums
North Yarmouth

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