In a couple of interviews this week, that I happened to catch, the brand new Nobel laureate Robert Shiller expressed great concern for what he deems to be the "most important problem that we are facing today", income inequality. Honestly, I struggle with this one almost as much as I struggle with protectionism.
While I am no economist---I am simply an ardent observer of the world around me---I suspect that there may be something to this popular notion that, somehow, middle-incomers are losing out to the wealthy. However I, as do eminently more qualified contributors to the topic, also suspect that it is gleaned from data that doesn't nearly account for all the variables---not the least of which being the composition of households today versus, say, thirty or forty years ago (fewer workers in the home bringing down the "household" income number). The articles linked to the final paragraph offer looks at other glaring omissions.
Being the 51 year-old observer---who spent his formidable years in a most everyday middle-income American household---I, like you, if you're of age, have a keen perspective on life in the 70's versus today. While Mom and Dad both worked full time, I earned a pretty steady paycheck myself from the age of 13 on (I can't seem to recall to what extent my 3 older brothers were gainfully employed). Dad---who can yet recall the day his little sister was born in a railway car, and of when, at the tender age of 12, he spent his entire summer cutting wood, and later playing college football without a face mask---was, still is in fact, quite the nostalgist, as was my maternal, social-security-receiving, grandmother. I spent untold hours at the foot of Grandma's rocker (her bedroom was next to mine) as she---the daughter of a middle-income New Mexico “lawman”---shared the wonderful anecdotes of her youth. Like the games of gin she played with the town drunk through the bars of his jail cell. And how, upon returning home in the evening---when fresh chicken was for supper---she was always assigned step one (the euthanizing) of preparing the main course. While middle income lifestyles of the 70s were no match for today's, they were cake compared to earlier generations.
Our household was blessed with at least 4 incomes in those days, and that was pretty much the norm in our community (do you get the distortion in the then-vs-now household income comparisons?). And we did fine without...well...I'll leave you to list all of the amenities today's middle-income family enjoys versus the family of the 1970s.
Imagine if we could start from here and turn back the clock to the 70s. My, how the then middle-incomer would rail against the unspeakable inequality he endures when compared to the 21st century American standing on that very same rung.
So then, my friends, while volumes of literature have been devoted to convincing you and I that stagnation and inequality run roughshod over today's America, please, just sit back and reminisce awhile. I bet, like me, you will find the data dubious, at best.
Lastly, it occurs to me that the above speaks more to the stagnation myth than it does the chasm that exists between the incomes of the rich and the rest---a supposed injustice that Shiller suggests could somehow be remedied (or at least reduced) by "raising taxes on the rich". Again, I'm no economist, which must be why I can't get my head around how raising taxes on the rich grape farmer, the Der Wienerschnitzel franchisee, the Lazy Boy furniture franchisee, Sears Corporation, and the proprietors of the Palace Bar, the Warner's Theatre, the Star Palace, Save On Energy, and Homes for Sale magazine (places where I worked as a kid) would have, in any way, shape or form, improved the lot of their workers. Now, if you're thinking that my past employers may not have all been "rich", by Shiller's definition, then ask yourself how raising taxes on their respective suppliers (lots of "rich" folks up there) could even remotely benefit (or not, in fact, hurt) middle-income business owners, or their middle and lower-income employees. I guess it takes a Yale economist to figure that one out.
While there's so much more to be explored around the whole income inequality issue---I've tackled it here on numerous occasions (go here, here and here)---for today I'll simply say, in light of the amazing gains achieved on behalf of middle-(and lower)-income Americans over the past few decades, who gives a rip?