It's funny, you know, that while the mistaken idea that "income inequality" has been increasing since the Reagan years has become a mantra for many, the numbers in real dollars show that the amount of work, work experience, and education are the real reasons for differences in income, says OpinionJournal's Featured Article:
- Households with two full-time workers earn five times as much as households in which nobody works. Median income for households with two full-time earners was $85,517 in 2003 compared with $15,661 for households in which nobody worked. Median income for households with one worker who worked full-time all year was $60,852, compared with $28,704 for those who worked part-time for 26 weeks or less.
Alan Blinder of Princeton emphasized this point in a 1980 study: "The richest fifth of families supplied over 30% of the total weeks worked in the economy," he wrote, "while the poorest fifth supplied only 7.5%. Thus, on a per-week-of-work basis, the income ratio between rich and poor was only 2-to-1. This certainly does not seem like an unreasonable degree of inequality."
- Experienced supervisors earn twice as much as young trainees. Median income for households headed by someone age 45 to 54 was $60,242 in 2003, compared with $27,053 for those younger than 24. When we define people as poor or rich at any moment in time, we are often describing the same people at earlier and later stages of life. Lifetime income is a moving picture, not a snapshot.
- Those with four or more years of college earn three times as much as high school dropouts. Median income for college grads was $68,728 in 2003, compared with $22,718 for those without a high school diploma.
These points are made in rebuttal to a series of articles in the WSJ and NYT, detailing the supposed "inmobility" of American labor markets. These are mistaken, and even the researchers whose studies formed the basis for the arguments now say tht their own research was distorted.
To repeat, there is no evidence that it has become harder to get ahead through hard work at school and on the job. Efforts to claim otherwise appear intended to make any gaps between rich and poor appear unfair, determined by chance of birth rather than personal effort. Such efforts require both a denial that progress has been widespread and an exaggeration of income differences. To deny progress, the {New York Times} series claims that "for most workers, the only time in the last three decades when the rise in hourly pay beat inflation was during the speculative bubble of the 90's." Could anyone really believe most workers have rarely had a real raise in three decades? Real income per household member rose to $22,966 in 2003 from $16,420 in 1983 (in 2003 dollars)--a 40% gain. (emphasis added)
Income -- real income -- has risen by forty percent in the past twenty years. The poor aren't getting poorer, they're demonstrably richer.
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