Re: alternate universe on income inequality

[Paul <paul_@xxxxxxx>]

The post (from a Hayak list?) is almost too silly to comment on.  The table
has nothing to do with income *distribution* (the share that each part of
society is getting).  It just shows that, no surprise, income went up over
35 years (yes, 35 years!) and that at least *some* of this income reached
everyone - no matter how unequally.  While we're at it, why not show that
income went up over 100 years?  By that logic we are guaranteed to be a lot
more equal.

The real figures can be found at
http://www.census.gov/hhes/income/histinc/ie3.html  (changes by percentile)
http://www.census.gov/hhes/income/histinc/ie2.html  (changes by gini
coefficient)

Remember that for changes in income share, a small change in percentage
translates to a large - in this case massive - transfer of income.  To put
it succinctly: over this period the U.S. went from being the most equal
developed country in the world, to the most unequal (see OECD).  A proud
heritage thrown away.  Most assumptions about our economy, society and
politics must now need to be rethought - and for the worse.

[BTW, the income figures in some ways understate the larger picture.  For
the wealthy, large amounts have been squirrelled away in tax
shelters\deferrments while the less well off 50% of the country has seen
their pensions (future income) unravel.  I posted on this last week re
Wolff's paper, a follow up to Doug's post.]

Joel Blau writes:
> The following article is  cited by Jack Shafer in Slate. Do any PEN-Lers
> want to explain what they did to obtain these conclusions?
> Joel Blau
>
> EconLog
> Squeezed Up
> Permanent Link (September 20, 2004)
> Edited by Arnold Kling
> Arnold Kling



> Squeezed Up, September 20, 2004
> The Washington Post (possibly more reliable link here) does not use phony
> documents, but the thrust of the story, including the headline "More U.S.
> families struggle to stay on track" is at variance with the facts that they
> present. The key chart, which is included on the jump page in an obscure
> way and never discussed in the article, reports on the change in the
> distribution of income, using 2003 dollars (I converted the data to tabular
> format).Income Distribution Percent of Households
>
>  Range 1967 2003
>
>  $75K and up 8.2 26.1
>
>  $50K - $75K 16.7 18.0
>
>  $35K - $50K 22.3 15.0
>
>  $15K - $35K 31.1 25.0
>
>  under $15K 21.7 15.9
>
>
> The article emphasizes that the middle has shrunk, from 22.3 percent of
> households to 15.0 percent. What it does not point out is that the two
> categories below the middle also have shrunk, from 52.8 percent of
> households to 40.9 percent. Adjusting for inflation, the percentage of
> households with incomes over $50,000 has climbed from 24.9 percent in 1967
> to 44.1 percent in 2003.
>
> The article's claim that it has become harder to stay in the income range
> of $35,000 to $50,000 is correct, if what you mean by "harder to stay" is
> that it has become difficult to avoid being squeezed up into a higher
> category.
>
> UPDATE: More data and analysis, from Robert Rector.
>
> UPDATE 2: Bruce Bartlett found similar problems with a New York Times story
> a few weeks ago.
>
> For Discussion. In what ways do these data overstate or understate the
> degree of upward mobility in the economy?