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Last week, 1.7 million viewers tuned in to watch Senator Bernie Sanders (I-VT), alongside Michael Moore and Senator Elizabeth Warren (D-MA), talk about income inequality. The 90-minute online discussion featured millionaire seniors expatiating on a diverse array of economic fallacies, such as the middle class being built by unions and that the rise of an oligarchy is causing economic inequity.
Sanders, who owns three homes, went into his usual shtick: decrying the growing number of billionaires and whining that the top tenth of 1% owns as much wealth as the bottom 90%. The solutions to close the gap? Free stuff from the government!
According to the panel, these policy proposals would remedy income inequality. But is this even a concern in the U.S. and other western countries? If you ask the average young person, they would likely cite this as the greatest challenge facing the nation today. You can’t blame them. Americans are repeatedly lectured to that the middle class is being systematically destroyed, the poor are getting poorer, and their pecuniary woes could be alleviated, if only the rich paid their fair share.
Sure, the wealthy are becoming wealthier. But you know who else is? Everyone.
America’s Mythical Income Inequality
It is often reported that the middle class has dwindled over the last 50 years. What was once a vibrant middle class has now metastasized into one of hardship, resentment, and destitute. Just look at the data.
Between 1967 and 2016, the number of middle class U.S. households making $35,000 to $100,000 annually tumbled from 53% to 42%. Ultimately, the ostensible deduction from these figures is that these same households are slipping into low-income brackets.
At first glance, this would be preposterous. How could the most prosperous nation on the planet experience a sliding middle class? This is a crisis. The government needs to act.
Well, they aren’t, it isn’t, and it doesn’t. Snapshot data is dangerous to present because it conjures up a kneejerk reaction that does more harm than good.
Here is the reality: during the same period, the number of households earning $100,000 or more per year surged from 8% to 28%. Moreover, the percentage of households earning less than $35,000 dropped from 39% to 30%.
Simply put: there is indeed a shrinkage of the middle class as well as the lower class, but that is because workers are moving into higher income categories, which is known in economics as upward mobility.
Income Mobility is Still a Thing
It’s a fun but deceitful game that the likes of Sanders and Warren play – the media also participate in this leftist pastime. If you want to create class warfare, this is how you do it: you display a chart that highlights a percentage of Americans who are poor, and then conclude that they remain that way for the rest of their lives. You omit absolute incomes and only focus on the share of national income.
Rather than simply comparing rich citizens and the impecunious in one year and the next, you should instead show households over time. By observing the bottom 20%, you generally witness a long-term trend: they increase their incomes because they have enhanced their human capital by obtaining education, work experience, and in-demand skills.
Everyone’s income status changes throughout the years. You can one year be in the top 5% and you can one year be in the top 25%. For instance, in November 2017, Cornell University professor Thomas Hirschl and Washington University professor Mark Rank published a paper, titled “The Life Course Dynamics of Affluence.” The research found a few interesting details:
- 53% of Americans will be in the top 10% of income for at least one year.
- 70% of Americans hit the top 20% for at least one year.
- 62% of Americans are in the top 20% for at least two years.
This is economic mobility.
Another cheap trick that the anointed employ is including individuals who will report lower incomes or net worth. The misleading statistics often consist of students, young people entering the workforce, and immigrants. This allows the bureaucrats to come to a politically-motivated conclusion.
Legendary economist Thomas Sowell has been measuring and writing about this for years:
“Alarmists are not talking about real flesh and blood people. They are talking about abstract categories like the top or bottom 10 percent or 20 percent of families or households. So long as all incomes are not identical, there will always be top and bottom 10 percents or 20 percents or any other percents. But these abstract categories do not contain the same people over time. Behind both the statistics on inequality that are spotlighted and the statistics on ever-changing personal incomes that are ignored is the simple fact that people just starting out in their careers usually do not make as much money as they will later, after they have had years of experience.
Who should be surprised that 60-year-olds have higher incomes and more wealth than 30-year-olds? Moreover, that was also true 30 years ago, when today’s 60-year-olds were just 30. But these are not different classes of people. They are the same people at different stages of their lives. At some times and places, there have been whole classes of people who lived permanently in poverty or in luxury. But, in the United States today, the percentage of Americans who fit either description does not reach beyond single digits.”
What Should We Complain About?
Mankind has always had to search for a villain to blame for their problems. This has been ubiquitous throughout human history all over the world. It’s just that it has gotten worse since the end of the Second World War. Something happened. Since then, we have been sold a Mephistophelean bill of goods: we are special for merely existing, we are entitled to someone else’s property, we should be given something for nothing.
At some point, we have shifted the responsibilities of adulthood to somebody else. We have sought out a boogeyman for our troubles. We have transformed envy into a virtue, hard work into a sin. No wonder why most people are telling the pollsters and the scientists that they’re miserable!
So, should there be something to complain about? Yes and no.
Let’s briefly compare life in the U.S. today to 100 years ago.
In 1918, polio was rampant, personal hygiene was rare, household chores took an entire day to complete, infant mortality rates were 50%, and only 10% went out to a restaurant. In 2018, polio has been all but eradicated, personal hygiene has improved, household chores are automated, infant mortality rates are in the single digits, and half the country eats away from a home on a regular basis.
But there are several things we can squawk about. The Federal Reserve destroying the value of the U.S. dollar, corrupt politicians, representatives who want to take even more from your wallet, and officials who want to send young men and women to fight and die in senseless wars. It’s usually the institutions that we can grumble about, not so much the marketplace.
Senator Sanders enjoys griping. To Sanders and his ilk everything is an injustice. If a corporation posts a profit, it is a national tragedy. If someone has one dollar more than their neighbor, it is an emergency. If a wealthy man doesn’t want to leave his estate to the government, then he is selfish and greedy. Shrieking about income inequality, no matter how factually incorrect he may be, is only an excuse for Sanders to advocate and impose socialism on the country. If he gets his way, then income inequality would become extinct because poverty would be a nationwide egalitarian enterprise.
Do you agree with Senator Bernie Sanders on income inequality? Let us know in the comments section!Whatfinger.com