Arnold Kling  

Income Distribution Facts

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While the consistently pessimistic and erroneous Louis Uchitelle is reassuring elitists that America's middle class is insecure and in need of help, economist Steve Rose is crunching some numbers.

The approach used here tracks family incomes over 15 years for people in their prime-earning years...

These numbers provide a basis for estimating the size of the group with economic interests aligned with Democratic Party based on living standards. If the narrow definition of including only the first two groups is used, then the numbers of 19 percent of males and 27 percent of females are probably much smaller than most progressive commentators would estimate.


But here is the kicker:

[Between 1959 and 2003] there has been a large increase in the number of the best-paying jobs with the share of the upper tier growing by 14 percentage points, the share of middle tier remaining almost constant, and the share in the lower tier declining by 12 percentage points. Contrary to what some on the left might think, the share of bad jobs fell significantly as more workers with postsecondary education moved into an expanding set of managerial and professional jobs.

Read the whole thing. Twice. Especially if you are Louis Uchitelle.

Thanks to Michael "rational exuberance" Mandel for the pointer.


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CATEGORIES: Income Distribution



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The author at The Club for Growth Blog in a related article titled Thursday's Daily News writes:
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COMMENTS (5 to date)
monkyboy writes:

I don't see anything in the two articles that contridict one another. What in the Uchitelle article is "erroneous?"

spencer writes:

why does he look at the 1959-2003 period as one era when there was clearly a break point around 1980. From 1960 to 1980 was one of the greatest booms in US economic history -- economic growth was strong in the 1970s even though it has a bad reputation because of volatility and inflation.
Since 1980 real growth has been weaker and income and inequality has risen sharply.

It is like the index of dependency you cited above. A guick reading of the data- I confess I have not yet downloaded the data and looked at it closely-- shows that it is the Republicans that expanded government the most over the last quarter century. Maybe liberaterians are supporting the wrong party.

Daniel Slate writes:

I love this part:

While income and consumption are the chief measures of a nation's standard of living, other, more subtle indicators also play an important role - and several of them are not doing so well. Life expectancy in the United States, while still rising, has fallen behind that in France, Germany and Japan.

So let's get this straight...we're complaining because we're improving, but we're not improving as much as some other countries? Please.

'What in the Uchitelle article is "erroneous?"'

All the comparisons to The Man in the Gray Flannel Suit. As Megan McArdle points out, the protagonist and his wife were constantly worried about money and job security.

The book was supposedly an indictment of the corporate rat race of the 50s. The hero drops out of it to take a lower paying job, because he doesn't want to work week-ends, nor '20 hour' days.

Here's how the NY Times obituary of Sloan Wilson described the family that supposedly was so secure:

'Married for 12 years, with time taken away by war and now with three small children, they fret in a tacky house in Westport, Conn., driven by contrary social aspirations and not enough money to enjoy any of it. The house needs repair, the children schooling, and the car is wheezing.'

That'll teach Uichetelle to re-write Paul Krugman columns.

Lancelot Finn writes:

It's possible that the middle class is increasingly insecure and that there are more good jobs. How? If there's more social mobility. There may be more good jobs, but there's also more blacks and Hispanics and sons of poor people who are increasingly able to compete for them.

Actually, more good jobs won't improve economic security at all, if economic security means non-likelihood of suffering a drop in income. Suppose each person, each year, picks a random draw from the set of all socially available salaries-- complete social mobility. In that case, economic security is inversely related to income (the higher you are, the further you have to fall). Getting a good job makes you more insecure because you might lose it and be unable to sustain the standard of living you've come to expect; getting the worst job around, assuming you figure out how to live on it, makes you economically secure because you have nowhere to go but up. And raising the general level of these salaries won't improve economic security, though it will improve welfare.

If economic growth is controlled for, economic security is just the opposite of social mobility. The question is not whether the economy is generating good jobs so much as who is getting the jobs, and from whom.

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