Politicians constantly find crises they will solve by increasing government power. But why is inequality a crisis?
Alexis Goldstein, of a group called The Other 98 percent, complains that corporations got richer but workers’ wages “are lower than they’ve been in 65 years.”
That’s a common refrain, but it’s wrong. Over the past 30 years, CBO data shows that the average income of the poorest fifth of Americans is up by 49 percent. That doesn’t include all the innovations that have dramatically improved everyone’s life. Today even the poorest Americans have comforts and lifespans that kings didn’t have a century ago.
George Mason University economist Garett Jones says, “If I was going to be in the bottom fifth in the America of today versus the bottom fifth of America in 1970 or 1960, it’s hard to imagine that anybody would take that time machine into the past.”
And despite America’s lousy government schools and regulations that make it tough to start a business, there is still economic mobility. Poor people don’t have to stay poor. Sixty-four percent of those born in the poorest fifth of the U.S. population move out of that quintile. Eleven percent of them rise all the way to the top, according to economists at Harvard and Berkeley. Most of the billionaires atop the Forbes richest list weren’t rich. They got rich by innovating.