A Truly Happy Moment for Some Strangers

U.S. taxpayers are still upwardly mobile according to a new Treasury study. Sometime in the last year I heard a lot of doom-and-gloom about people who were stuck in the same economic class that they started in. I suppose I should stop watching the evening news…

If you’ve been listening to Mike Huckabee or John Edwards on the Presidential trail, you may have heard that the U.S. is becoming a nation of rising inequality and shrinking opportunity. We’d refer those campaigns to a new study of income mobility by the Treasury Department that exposes those claims as so much populist hokum.OK, “hokum” is our word. The study, to be released today, is a careful, detailed piece of research by professional economists that avoids political judgments. But what it does do is show beyond doubt that the U.S. remains a dynamic society marked by rapid and mostly upward income mobility. Much as they always have, Americans on the bottom rungs of the economic ladder continue to climb into the middle and sometimes upper classes in remarkably short periods of time.

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Also encouraging is the fact that the after-inflation median income of all tax filers increased by an impressive 24% over the same period. Two of every three workers had a real income gain–which contradicts the Huckabee-Edwards-Lou Dobbs spin about stagnant incomes. This is even more impressive when you consider that “median” income and wage numbers are often skewed downward because the U.S. has had a huge influx of young workers and immigrants in the last 20 years. They start their work years with low wages, dragging down the averages.

This sounds very good, and it provides useful contrast with John Edwards’ Two Americas shtick. The article doesn’t mention it, but there are a few caveats: first, the study only applies to taxpayers. Those who don’t file taxes probably don’t have any income mobility at all (duh).

Also, the study cannot give us information about those who filed taxes in 1996 (the first year of the study), but who–for whatever reason–didn’t file in 2005. If those people (especially from the lowest income groups) filed in 1996, but didn’t file in 2005 then the study may be missing a large block of people who saw their incomes drop.

Still, the study should be used to put the lie to the idea that the economy is horrible and we’re all going to have to get used to the taste of cardboard. Things are not bad, contrary to the dreams of the Left. In fact, economic indicators show that things are just fine.

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~ by Gabriel Malor on November 13, 2007.

 
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