Hispanic Pundit's picture

You have just illustrated

You have just illustrated one of the many reasons why I hate income inequality measurements. They really tell us nothing about how the average joe is doing, only how the rich is doing compared to the average joe. Think of these two scenarios:

Scenario 1

In your parents generation, in real wages, the middle class made x and the rich made y.

Today the middle class make 2x and the rich make 4y. In this case, income inequality has increased (significantly) yet everybody is better off because of it.

Scenario 2

In your parents generation, in real wages, the middle class made x and the rich made y.

Today we let in a significantly higher amount of immigrants than in your parents age, especially poor immigrants from Mexico. What do you think that is going to do to income inequality? Those poor immigrants are going to bring down the mean of the middle and lower class - making income inequality look worse yet the world is clearly better (as far as real wages and wealth go) than it was yesteryear. There are many other criticisms as well.

In other words, as long as the middle and lower class are getting more than they used to, who cares how much the rich are getting? An economy is not zero sum...one persons gain is not another persons loss. Most of the time the rich work to increase the size of the pie not to aggrandize more of it. So unless you are a 'hater' at heart, I don't see why you should worry at all about how much the rich make.

On the other hand, if you can show me that income mobility, real wages, and/or real standard of living has decreased, then you will have my attention. But the reality of the situation is that that is not what has happened. In fact mobility, real wages, and standard of living have all increased, oftentimes dramatically since your parents generation.

There is a reason why the left, and really only the left, focuses so much on income inequality - its a great way to make a rosy picture look bad, and the populous just fall for it everytime.


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