Thursday, February 9, 2012

The Poor Are Getting Richer!

Wait a second...isn't there all this outrage with the Occupy movement about the richest 1% of Americans controlling everything while everyone else is being held down?  Well, the percentage of the population earning over $100,000 (in real terms, using 2006$) has been going up.  I imagine that the tail of the distribution has been getting longer.  I think the despicable part is NOT that some people have so much money, but that they can use their money through the political system to gain at the expense of others.

But I digress...back to my point:  for every income bracket under $75,000 the people in those brackets have been getting richer over time.  See this presentation put together by Antony Davies of Duquesne University.  It shows that over time, the percentage of people in America in the income bracket "under $15,000" has been steadily decreasing.  Same with the other brackets until you get to the $75,000+ range.  More people are falling into the high income part of the distribution while fewer people are in the low income range.

This chart says nothing about "income inequality," but I think it's great if everyone is experiencing a growing income.  So what if the top 1%'s wealth is growing at twice the rate of the bottom 1%?  As long as everyone is growing, that's phenomenal.  AND the presentation only talks about real dollars; it excludes the improvements in every day living.  For instance, back in 1980 the Dire Straits were singing about how all their Rock'n'Roll riches had bought them a microwave oven!  Even really poor people have microwaves these days.  Think back to when rich guys had the giant projection TVs.  Now you can get a screen almost as big if you make even $30,000/year (depending on how you prioritize things).  Let's not forget improvements in computer technology and reduction in price.  What's that you say?  Cell phones?  Yeah, definitely cheaper and more functional than they used to be.  Just about everyone can have a cell phone these days if they choose.  That wasn't always the case...and it certainly didn't fit in your pocket when only the rich could afford one.

My point is that you should be careful of what you believe.  In fact, don't just take my word...go dig up some numbers for yourself.  In fact, here is a link to the data source used to create Antony's presentation.  It's easy to get outraged, so just make sure your anger is channeled in the right direction.

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