The Poor are getting Richer and the Rich are getting Poorer?
Before coming to Ithaca, I lived in a pretty conservative area of the country. I was used to feeling like a outsider in a hostile environment. Than I came to Ithaca and for the first year or so I was simply amazed that I didn’t have to have hour long discussions after saying something controversial like “Racism is still alive and well in America” or “Maybe torturing people is a bad thing”. It felt like coming home.
But after a few years, I’ve got to say that the honeymoon is over and I find myself aggravated with IC liberals almost as often as I’m upset with conservatives. My latest grief has come as I try to talk to any liberals, and even some populist republicans, about the recent Treasury Department study that tackles an assumption I often see in my fellow students: The rich stay rich and the poor stay poor.
According to the latest figures, based on close to 100,000 income tax returns from 1996 to 2005, American families’ incomes are anything if stagnant. As you can see in the first graph, breaking America down into income quintiles (i.e. five groups sorted by income with the same number of households in each), shows us that the median incomes for the lowest quintile nearly doubled in the nine year stretch covered by the study. Whats more, the richest 5% of the country actually saw their median incomes decrease by 6.8% while the richest 1% saw theirs drop by 25.8%
The next two tables get a little more complicated, but they’re breakdowns of where people who were in a certain quintile in 1996 ended up in 2005. As you can see, roughly half of those in the lowest quintile moved to a higher position within 10 years. Even more impressive is that 3.6% of them actual made it to the highest quintile with 1.7% reaching incomes that rated in top tenth of the country. Prospects for the second and middle quintiles are also good, showing stability if not upward movement.
This final graph shows a break down of exactly how much income loss/gain each quintile experienced in this nine year period. Again, 81.4% of the lowest quintile saw in their incomes increase, out of which 53.5% saw an increase of over 100%. The remaining 18.6% either saw no change or a decrease in their income.
In contradiction to some economic populist’s rhetoric *cough* Edwards *cough*, income mobility isn’t declining in the United States and stays true to many of the numbers from the 70s and 80s. As much as some liberals might like how their version of poverty politics sound, the facts just aren’t with them on this one.
Click here to read the study
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