Bottom Line: Whether we look at Census Bureau data on Gini coefficients [a statistical measure of dispersion that quantifies income inequality on a range from 0% for complete equality to 100% for complete inequality where one person receives all of the income] for U.S. households, families, or year-round workers, or look at the share of income going to the top fifth of Americans, there is absolutely no statistical support for the commonly held view that income inequality has been rising recently. So why are we even having this national debate about solutions to the "non-problem" of rising income inequality. Is this another "imaginary hobgoblin" (see below)?
H.L. Mencken: "The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary."
Monday, October 31, 2011
Income Inequality
Does it exist? You might say, "Yes! Of course!", but economics professor Mark Perry would say, "Not so fast":
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8 comments:
Not surprising, as the disparity really reached it's height in the Reagan adminstration. Once you've already got a huge gap, more change will look statistically significant. You want a real statistic? Compare the average CEO salary to the averrage worker's salary. I'm not sure we can or should do something about it . . .but we shouldn't be trumpeting it as evidence of fairness.
Nice straw man you've torn down there, max. No one said there's "equality"--and of course we shouldn't hope for such--only that it's not increasing. And the charts don't show any justification for your little dig at the Reagan years.
Really? Which charts are those? It's just been obscured by the fact that the Reagan tax cuts also led to avery strong economy, where virtually everyone gained. Some were much more equal than others, though. There's a reason why so much income tax is paid by so few.
The charts at the link, Max. Go take a look-see, and *then* see if you stand by your claims. Especially see the charts for the period of the Reagan years--I don't see a massive shift there, do you?
The problem with those charts is that they measure the fully employed. Obviously, there will be less of a discrepansy of wealth didtribution if you ignore the unemployed and the underemployed.
I trust you let Professor Perry know of his mistake?
It's not a mistake . . . it's a classic example of "How to Lie With Statistics."
"But it turns out that the rich actually got poorer under President Bush, and the income gap has been climbing under Obama.
"What's more, the biggest increase in income inequality over the past three decades took place when Democrat Bill Clinton was in the White House."
http://news.investors.com/Article/590383/201111030805/Income-Inequality-Rose-Under-Clinton-Obama.htm
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