The big myth of ris­ing in­come in­equal­ity

Chicago Sun-Times - - OPINION - MONA CHAREN @monacharen­EPPC Mona Charen is a se­nior fel­low at the Ethics and Pub­lic Pol­icy Cen­ter.

The Bi­den cam­paign de­serves praise for in­tro­duc­ing, at the Demo­cratic Na­tional Con­ven­tion, some­thing we haven’t seen a lot of lately — smiles. They’ve show­cased grins and joy­ful, danc­ing eyes on the faces of all sorts of Amer­i­cans. Sure, it’s corny. I don’t care. I al­most want to shout: “That! I’ll vote for that.” Enough of snarls, in­sults, den­i­gra­tion and lies. Please just lift this pall of poi­sonous ha­tred. That’s 80% of what I want.

Of course, we didn’t ar­rive at this mo­ment of bit­ter po­lar­iza­tion overnight, and we won’t be able to tran­scend it with one elec­tion. But the Bi­den team seems to be bet­ting that many of us are yearn­ing for a gi­ant step to­ward de­cency.

As much as I long for na­tional rec­on­cil­i­a­tion and the paci­fi­ca­tion of our pol­i­tics, I’m wor­ried about some­thing else — the flip side of po­lar­iza­tion. As shrill and vi­cious as the dis­course has be­come in re­cent years, there has also been a cu­ri­ous con­sen­sus emerg­ing.

On both the left and the right, you find strik­ing agree­ment that the past sev­eral decades have been a time of eco­nomic de­cline. Our econ­omy, they say, is bro­ken. We’ve been told by Sen­a­tors El­iz­a­beth Warren and Bernie San­ders on the left, and by Don­ald Trump and Sen. Josh Haw­ley on the right, that the wealth gains of re­cent years have gone en­tirely to the top 1% of earn­ers, that real wages for the mid­dle class have stag­nated and that the “game is rigged.”

Is the mid­dle class in trou­ble? Only if you think it is bad news that, since 1967, more Amer­i­cans have joined the up­per mid­dle class. In a study pub­lished by the Brook­ings In­sti­tu­tion, Stephen Rose found that the num­ber of Amer­i­cans in the up­per mid­dle class in­creased from 6% in 1967 to 33% in 2016. Among African Amer­i­cans, the per­cent­ages jumped from 1% to 14% over the same pe­riod. One rea­son the mid­dle class is shrink­ing is that more peo­ple are mov­ing up.

Michael Strain’s new book, “The Amer­i­can Dream is Not Dead (But Pop­ulism Could Kill It)” is chock full of myth-bust­ing sta­tis­tics. Has the Amer­i­can mid­dle class seen its wages stag­nate for 30 years? No. Since 1990, the wages of typ­i­cal work­ers (not man­agers or su­per­vi­sors) have in­creased by 33%. Maybe that’s not enough, but it’s not stag­na­tion.

What about ris­ing in­equal­ity? In­come num­bers alone don’t give the whole pic­ture. Strain shows, again, that when you in­clude taxes and trans­fers to in­come data, you find that in­equal­ity has de­creased by 7% be­tween 2007 and 2016.

Be­sides, some things can­not quite be cap­tured by sta­tis­tics. Peo­ple used to un­dergo surgery and be side­lined for months with stom­ach ul­cers. Now, most can be treated with a 14-day dose of Prilosec. Sin­gle and work­ing moth­ers to­day spend more time with their chil­dren than stay-at-home moth­ers were able to in 1965. And more than 90% of homes have air con­di­tion­ing to­day, com­pared with 60% in 1980.

There’s an­other fab­u­lous re­source for in­for­ma­tion on these mat­ters: It’s Pol­i­ There you can find a series of easy-to-fol­low videos by econ­o­mist Russ Roberts. He ad­dresses the tricks num­bers can play. Over time, the num­ber of house­holds con­tain­ing adults over 65 has steadily risen.

Nat­u­rally, if you com­pare a sam­ple of mid­dle-class house­holds from 1980 with a sam­ple from 2016 and fail to ac­count for the larger num­ber of re­tirees, it’s go­ing to look like the mid­dle class is los­ing ground. Even more crit­i­cal is the fact that mar­riage and fam­ily pat­terns have changed dra­mat­i­cally over the past sev­eral decades. There are many more sin­gle adult house­holds than in times past. So “house­hold in­come” can ap­pear lower, when the in­come of in­di­vid­u­als has ac­tu­ally in­creased.

The pop­ulists of right and left have agreed on some­thing that just isn’t so. The death of the Amer­i­can Dream has been vastly ex­ag­ger­ated. And to the ex­tent that they’ve con­vinced large num­bers of Amer­i­cans that our prob­lems are those of for­eign­ers tak­ing our jobs or greedy 1-per­centers hoard­ing all the gains for them­selves, we are di­verted from ad­dress­ing our true chal­lenges. Male la­bor force participat­ion has been drop­ping for many years. The way we price health care is opaque, and, frankly, borderline in­sane. Child poverty is ris­ing, in part be­cause of the rise of sin­gle-par­ent fam­i­lies. Our schools are in­ad­e­quate, deaths of de­s­pair are on the rise, racial dis­crim­i­na­tion re­mains a prob­lem, and our na­tional debt is out of con­trol.

And all of that an­te­dates the spi­ral­ing health, gover­nance, cul­tural con­flict and racial chal­lenges we must face. We have enough on our na­tional plate with­out talk­ing our­selves into the false be­lief in a bro­ken econ­omy that ben­e­fits only the rich.



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