A Few Points About Income Statistics
There are a number of people bewailing an imagined increase in income inequality: While I don’t think that such a measure should matter (what does it matter how much better off some are as long as nobody is worse off than they had been?), let’s dissect what is actually going on here: For those who think we are approaching some Gattica-like dystopia are completely wrong---in fact, they are interpreting a consequence of an improvement in our condition as a sign of its deterioration .
The problem is that most of the income pessimists are focusing on household income----not individual income. Now, while this might sound like a small difference (after all, shouldn’t the two be correlated), there is actually a tendency for household income to decrease as private income increases. What the “liberals” are bewailing is actually the increase in private income!
As individuals become richer, households become smaller: Because making more money makes moving into a household of one’s own easier but obviously reduces the income of the pre-existing household. If a couple has a son who goes from making minimum wage to making 20 dollars an hour, that son is likely to move out of the house. But now we have two households with---on average---half the income of the previous one as a result of the son’s increase in private income.
The leftists are making additional mistakes in their parsing of income statistics, however. They are ignoring the fact that individuals occupy different income brackets at different points in their life: Many of the poor are young people new to the work force who have yet to prove themselves in the market. Ignoring age when considering income statistics is a serious mistake.
Furthermore, the left---for better or worse (though here I actually agree with them, with reservations, of course)---favors open immigration: Which obviously amounts to allowing a constant influx of the impoverished. But, of course, the more impoverished people you allow into the country, the more impoverished people you will have in your country. To some extent, the left wants to have their cake and eat it too: They want to let poor people in and then, magically, have them cease to be poor.