Are The Rich Getting Richer and the Poor Getting Poorer?

Unfortunately, the government isn’t helping answer the question.

US government statistics on income inequality are mostly bogus for many reasons. They don’t adjust for shifts in the age of the population (older people are richer), for emigration (emigrants generally start poor), number of hours worked (shouldn’t someone doing three jobs have more?), or the composition of the “households” being measured (more single households among the poor means they are probably doing better financially but will show up as doing worse and the number of single households has sharply increased.)

In addition, the government doesn’t count some things as income that it should (earned income tax credit checks, housing vouchers) and does count things it should not (capital gains are not earned income, they are just trades of one asset for another.

So, the truth is hard to figure out. Still it seems a reasonable surmise that at least some rich are getting a lot richer (the crony capitalists), while other rich are not and the poor are indeed getting poorer. However, it’s always good to have one’s assumptions challenged and the article below does that. It adjusts “households” into individuals, and looked at that way, says the share of incomes from the bottom to the top has not changed much in recent years, that the income inequality “crisis” is not supported by the facts.

I am still guessing that crony capitalism is skewing the income patterns, but of course it is true that there are many beneficiaries of it who are not rich. Even the public employee in California  making over $800,000 does not quite make it to income millionaire status.

Click here for the story.