Income Disparity Explained (again)

This post is a rerun of one previously posted in A Reasonable Man:

Income disparity in a nutshell:

1.  When the cost of running/starting a business increases, fewer businesses remain/are started.
2.  With fewer businesses, there is less overall demand for employees.
3   With less demand for employees, employees' income declines.
4.  With fewer businesses, existing businesses face less competition.
5.  Less competition means that remaining businesses can raise their prices.
6.  Higher prices and lower wages mean more profits for the owners of remaining businesses.
7.  Lower wages to employees and higher profits for owners means increased income disparity.

Now let's reverse the process:

1.  When the cost of running/starting a business decreases, more businesses remain/are started.
2.  With more businesses, there is more overall demand for employees.
3   With more demand for employees, employees' income rises.
4.  With more businesses, remaining businesses face more competition.
5.  More competition means that remaining businesses must lower their prices.
6.  Lower prices and higher wages mean less profits for the owners of remaining businesses.
7.  Higher wages to employees and lower profits for owners means reduced income disparity.


So, the net-net is that anything that increases the cost of running/starting a business (say Obamacare, 10 years of wars,...etc.) increases income disparity and increases prices and anything that reduces  the cost of running/starting a business will reduce income disparity and reduce prices.