Who Cares If The Richer Are Richer? Everyone Else Is Poorer
The New York Times reports that it isn’t just the rich getting richer that’s a problem with American income inequality. It’s that the poor are getting poorer too:
Economic inequality in the United States has been receiving a lot of attention. But it’s not merely an issue of the rich getting richer. The typical American household has been getting poorer, too.
The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline, according to a study financed by the Russell Sage Foundation. Those are the figures for a household at the median point in the wealth distribution — the level at which there are an equal number of households whose worth is higher and lower. But during the same period, the net worth of wealthy households increased substantially.
The Russell Sage study also examined net worth at the 95th percentile. (For households at that level, 95 percent of the population had less wealth.) It found that for this well-do-do slice of the population, household net worth increased 14 percent over the same 10 years. Other research, by economists like Edward Wolff at New York University, has shown even greater gains in wealth for the richest 1 percent of households.
I’m honestly not certain what one has to do with the other. If you buy into left-wing economic thinking, which supposes that wealth is a zero-sum game and that if one group of people becomes more wealthy it comes at the expense of everyone else. Like eating a pie. One person eating a larger piece leaves less for the rest.
But out here in the real world, wealth is not a zero-sum game. Wealth is created. Just because rich people are getting richer doesn’t mean there’s less for everyone else.
What does matter, however, is that poor people are, in fact, getting poorer. Not because the 1% is gobbling up more of the pie, but because the economy under President Obama stinks, something we can illustrate with one chart (via Hot Air):
America needs to go back to work. We took a major blow when the housing market, inflated by government micromanagement of lending policy, collapsed but we haven’t recovered due to a series of misguided policies like minimum wage increases, Obamacare, and a seemingly never-ending expansion of unemployment benefits made it harder and more expensive for employers to employ people.
Americans can’t find jobs. And what jobs are available aren’t paying what they used to.
Blaming “the rich” for this problem is facile. Attacking the rich with higher taxes and other redistributionist policies won’t help. In fact, it will exacerbate the problem given that “the rich” are the people who start business and provide the capital which creates jobs for other.