Rich vs. Poor

[revaluation]

Thomas Sowell

Those for whom indignation is a way of life often inform us of the fact that families or households in the top 10 or 20 percent in income make far more money than people in the bottom 10 or 20 percent in income. What they almost never inform us of are how much money they are talking about and how many people in these different brackets actually work.

These omissions are neither incidental nor accidental. If the full facts were brought out, those facts would completely undermine the picture presented by the envy zealots or, as they prefer to be called, advocates of "social justice."

Despite the looseness with which the term "rich" is thrown around -- as in "tax cuts for the rich" -- most people to whom that term is sweepingly applied are far from being rich. First of all, whether you are rich or not depends on your wealth, not your income, but the statistics used by the envy zealots are almost always income statistics.

These are also usually statistics about family income or household income, which can be very misleading, because families and households differ substantially in size -- and where there are more people making money, they usually make more money.

While there are more than 19 million people working in households with incomes in the top 20 percent, there are fewer than 8 million people working in households in the bottom 20 percent. How much of an injustice is it that people who work get more money than people who don't work?

If you are talking about working full-time, 50 or more weeks a year, then there are more people doing that in the top 5 percent of households than in the bottom 20 percent. As Casey Stengel used to say, you can look it up. These are Census data, available on-line from the Current Population Survey, Table HINC-06.

It may not be a breakthrough on the frontiers of economics to say that work pays, but it does. Among households in the bottom 20 percent in income, there are more than 13 million people who do not work at all and fewer than 8 million who do work, counting both full time and part time workers.

How do people live without working? Millions in the bottom 20 percent live on the money earned by other people who do work and whose income gets taxed to pay for the non-workers. In addition, more than 4 million families in the bottom fifth in income live on property income and nearly 6 million live on various forms of retirement income, including Social Security. (Table FINC-06, for those who demand proof only from those they disagree with.)

What about those "rich" people we hear so much about? Studies that follow the same individuals over time have found that those in the top 20 percent and those in the bottom 20 percent are mostly the same people at different stages of their lives. Not only does work pay, when you have worked a longer time, it usually pays more.

High-income people are typically people who have reached their peak earning years in middle age. What does it take to reach the top 20 percent in income? In 2001, it took a little less than $85,000 -- for a whole household! (This is a different Census publication: "Current Population Reports," P60-218.)

How many yachts these people are going to buy, even if they get those "tax cuts for the rich" we hear about, is another story.

To reach the top 5 percent, you need an income of about $150,000 -- again, for a whole household. A middle-aged couple who have worked their way up in middle-class jobs, over a period of decades, can reach this peak -- and have much of it taxed away.

These publicly available numbers may be surprising news to some because neither in the media nor in academia do the envy zealots like to talk about actual dollars and cents. Or about work -- one of the few four-letter words that remains taboo.

They prefer to talk about percentage shares going to some people versus others. But people do not live on percentages. They live on money and on the things that money can buy, which is to say, their real income.

Despite all the hand-wringing about the fact that the bottom 20 percent get a smaller share than in times past, the real income of the bottom 20 percent has gone up by thousands of dollars. Moreover, the people who were in that bottom 20 percent in the past have also gone up into higher brackets.

[bigpoppanils]

If you are talking about working full-time, 50 or more weeks a year, then there are more people doing that in the top 5 percent of households than in the bottom 20 percent

what about people that live in areas where there aren't any jobs available? what about people that hold more than one part-time job? what about people that work full time or multiple part time jobs for mininum wage?

It may not be a breakthrough on the frontiers of economics to say that work pays, but it does. Among households in the bottom 20 percent in income, there are more than 13 million people who do not work at all and fewer than 8 million who do work, counting both full time and part time workers

how many people at the bottom end are senior citizens? disabled? in college? or once again live in areas where there just aren't any jobs?

some more questions:

how many of those in the bottom 20% are single parents?

how many of those in the top 20% are single parents?

how many of those in the bottom 20% have 3 or more children?

how many of those in the top 20% have 3 or more children?

how many of those in the bottom 20% have access to affordable child-care?

how many of those in the top 20% have access to affordable child care?

what are the education systems of those in the bottom 20% like?

what are the education systems of those in the top 20% like?

how many of those in the bottom 20% lack the money to go to college?

how many of those in the bottom 20% have health insurance?

how many of those in the top 20% have health insurance?

how many of those in the top 20% not work?

Despite all the hand-wringing about the fact that the bottom 20 percent get a smaller share than in times past, the real income of the bottom 20 percent has gone up by thousands of dollars. Moreover, the people who were in that bottom 20 percent in the past have also gone up into higher brackets

this statement is very misleading....salaries are higher, but the costs of housing, healthcare, childcare, college tuition, and food have collectively risen by thousands of dollars as well.

[starvingartist]

Originally posted by revaluation

Thomas Sowell

Those for whom indignation is a way of life often inform us of the fact that families or households in the top 10 or 20 percent in income make far more money than people in the bottom 10 or 20 percent in income. What they almost never inform us of are how much money they are talking about and how many people in these different brackets actually work.

Response: Well how much is it? Nowhere does this author point out the dollar amount just as he is criticisizing those who do the same. As far as how many people in these brackets actually work, well if we are talking statistically speaking on the poor end there will be people who work 0 hours and on the rich end there will people who work 60+ hours meaning any statistic shown on this would prove nothing on more work hours= higher income because it would not be resistant to outliers on either end.

These omissions are neither incidental nor accidental. If the full facts were brought out, those facts would completely undermine the picture presented by the envy zealots or, as they prefer to be called, advocates of "social justice."

Response: What is being omitted, again this author fails to point it out himself.

Despite the looseness with which the term "rich" is thrown around -- as in "tax cuts for the rich" -- most people to whom that term is sweepingly applied are far from being rich. First of all, whether you are rich or not depends on your wealth, not your income, but the statistics used by the envy zealots are almost always income statistics.

These are also usually statistics about family income or household income, which can be very misleading, because families and households differ substantially in size -- and where there are more people making money, they usually make more money.

response: This author has no idea what he is talking about. Obviously he has never read a Demographic and Lifestyle profile released by the Census Bureau. They do in fact clearly distinguish family size and income. THere are sections for number of people in household(not including family) and income earned. And there are sections for number of children, etc. It is actually quite detailed oriented.

While there are more than 19 million people working in households with incomes in the top 20 percent, there are fewer than 8 million people working in households in the bottom 20 percent. How much of an injustice is it that people who work get more money than people who don't work?

response: The same thing he charges envy zealots of doing, he does himself. 19 million people working in households with incomes in the top 20 percent. Does not mean that those 19 million people in the same household each work. It could actually men that only 2 million of those in the top 20 percent work. ANd that the remainding 17 million simply live in the same household.

If you are talking about working full-time, 50 or more weeks a year, then there are more people doing that in the top 5 percent of households than in the bottom 20 percent. As Casey Stengel used to say, you can look it up. These are Census data, available on-line from the Current Population Survey, Table HINC-06.

Response: Again this is misleading, first he uses top 5% which is actually a very small number, then bottom 20% which simply has a greater number of people. THis information is definitely skewed to mislead.

It may not be a breakthrough on the frontiers of economics to say that work pays, but it does. Among households in the bottom 20 percent in income, there are more than 13 million people who do not work at all and fewer than 8 million who do work, counting both full time and part time workers.

Response: WHich side is he arguing again. Of course at the bottom those who do not work do not earn income. However I am suspicious on the fact he did not even feel the need to mention those in the top 10 or 20 percent who do not work. Obviously this would show that there are many people in the top that do not work. For reasons ranging from inherited wealth, etc.

How do people live without working? Millions in the bottom 20 percent live on the money earned by other people who do work and whose income gets taxed to pay for the non-workers. In addition, more than 4 million families in the bottom fifth in income live on property income and nearly 6 million live on various forms of retirement income, including Social Security. (Table FINC-06, for those who demand proof only from those they disagree with.)

response: THis is actually a symptom of many possible problems. Including the increasing unemployment rate.

What about those "rich" people we hear so much about? Studies that follow the same individuals over time have found that those in the top 20 percent and those in the bottom 20 percent are mostly the same people at different stages of their lives. Not only does work pay, when you have worked a longer time, it usually pays more.

Response: Completely baseless argument. Those in the top 20% of course make more then those in the bottom 20%, but it does not mean because they are working more or for a longer time. Wow what a way to jump to falty conclusions

High-income people are typically people who have reached their peak earning years in middle age. What does it take to reach the top 20 percent in income? In 2001, it took a little less than $85,000 -- for a whole household! (This is a different Census publication: "Current Population Reports," P60-218.)

How many yachts these people are going to buy, even if they get those "tax cuts for the rich" we hear about, is another story.

To reach the top 5 percent, you need an income of about $150,000 -- again, for a whole household. A middle-aged couple who have worked their way up in middle-class jobs, over a period of decades, can reach this peak -- and have much of it taxed away.

These publicly available numbers may be surprising news to some because neither in the media nor in academia do the envy zealots like to talk about actual dollars and cents. Or about work -- one of the few four-letter words that remains taboo.

Response: Actually it is discussed on a national and local level through many media and academia. All of this information is available online as well published by the Census Bureau. And if people wished they could look up reader friendly material on Census Bureau related data on a number of outlets. Including Simmons, etc. I have worked for advertisers and they use a variety of information sources which in fact exists to look up dollars, cents, family size, etc.

They prefer to talk about percentage shares going to some people versus others. But people do not live on percentages. They live on money and on the things that money can buy, which is to say, their real income.

Response: Some people live on money which did not come from income.

Despite all the hand-wringing about the fact that the bottom 20 percent get a smaller share than in times past, the real income of the bottom 20 percent has gone up by thousands of dollars. Moreover, the people who were in that bottom 20 percent in the past have also gone up into higher brackets.

Response: Where is he getting this information. Also this may just be an inflation cause related increase.

Overall this article is pointless, baseless, and whoever wrote it is ignorant on a myriad of levels.