Tuesday, November 01, 2011

Income Inequality?

Promoters of the income inequality meme—Occupy Wall Street, the Obama White House, liberal think tanks, "progressive" bloggers—typically point to data showing how "rich" households and families have been getting even richer vs. those in the middle class. But yet there's no evidence of any significant change in income inequality among individuals as this gobsmacking chart from the must-follow Political Calculations blog shows:
An explanation from PC:
The chart [above] shows what we find for each grouping of Americans according to their Gini Coefficient, where a value of 0 indicates perfect equality (everyone has the same income) and a value of 1 indicates perfect inequality (one person has all the income, while everyone else has none). … But here's the thing. We have already confirmed that there has been absolutely no meaningful change in the inequality of individual income earners in the years from 1994 through 2010. If income inequality in the United States was really driven by economic factors, this is where we would see it, because paychecks (or dividend checks, or checks for capital gains, etc.) are made out to individuals, not to families and not to households.
It would seem then that the real complaint of such people isn't about rising income inequality, but rather, how people choose to group themselves together into their families and households.

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