Land of opportunity
The Florida Times-Union
Originally published 02:32 p.m., January 24, 2008
Updated 02:32 p.m., January 24, 2008
The rich get richer and the poor get poorer.
That’s been repeated so many times that a lot of people may assume it’s true.
But it isn’t.
The Wall Street Journal, citing recent Treasury Department research, says the precise opposite.
The study compared tax returns of people over age 25 from 1996 to 2005.
Among its findings:
F The income of a very poor person, who works full time, increased 90 percent over the decade, whereas the income of a wealthy person went up just 10 percent.
F Only one group did not fare well — the richest 1 percent. Overall, they lost 25 percent of their income.
F Nearly 60 percent of the richest Americans dropped into lower income groups, replaced by those who previously were below them.
In other words, people start in low-income brackets and, unless they choose the wrong profession, move up the economic ladder as they improve their career skills.
Those on top sometimes become complacent, or maybe make bad decisions, and slip a rung or two.
One more thought:
“The after-inflation median income of all tax filers increased by an impressive 24 percent,” the article said.
Generally speaking, everyone is getting richer. But the poor are doing it more rapidly than the affluent.
America truly is the land of opportunity.
madpoet (anonymous) says...
Sure we make more money but the cost of EVERYTHING keeps going up so we actually have less left over.
January 24, 2008 at 3:34 p.m. ( permalink | suggest removal )
wanderer (anonymous) says...
I have a lot of respect for the Journal, but I think something in this study is flawed. Most reports that I've seen suggest that the rich/poor gap is widening. Take the following, which ran last August:
ScienceDaily (Aug. 9, 2007) — The rich really are getting richer and the poor are getting poorer, a new University of Michigan study shows.
The study---the most recent available analysis of long-term wealth trends among U.S. households---is based on data from the Panel Study of Income Dynamics, conducted by the U-M Institute for Social Research (ISR) since 1968.
Over the last 20 years, the net worth of the top two percentile of American families nearly doubled, from $1,071,000 in 1984 to $2,100,500 in 2005. But the poorest quarter of American families lost ground over the same period, with their 2005 net worth below their 1984 net worth, measured in constant 2005 dollars.
The poorest ten percent of families actually had a negative net worth---more liabilities than assets. The poorest 5 percent of American households had a negative net worth of a little more than $1,000 in 1984, compared to nearly $9,000 in 2005.
"These findings show that the wealth gap is increasing steadily," said Stafford, a senior research scientist at ISR and director of the Panel Study of Income Dynamics, which is funded primarily by the National Science Foundation and the National Institute on Aging.
January 24, 2008 at 3:55 p.m. ( permalink | suggest removal )
open_eyes (anonymous) says...
Lots of ways to spin stats.
Let's see, someone making $10 million a year, his income *ONLY* goes up 10%, or increases by $1 million/year. A very poor person, making, say, $10,000/year, his income goes up 90%, or $9,000/year.
So the rich person's income increased *ONLY" $1 million/year, while the very poor person's increased, by comparison, a *WHOPPING* $9,000/year.
So the gap between their income before was $9,990,000. It has INCREASED to $10,981,000.
I'm just using this as an example that there are lots of ways to spin stats. I tend to agree with the latter post that the gap is steadily increasing, and the way they've spun the stats in the article has some flaws.
The main problem, I think, is that the very rich just can't seem to get even richer fast enough to suit themselves.....
Need an example?
IBM just announced record profits of something like $10.4 BILLION for 2007, and have raised their profit targets for 2008. Their response? They have announced nearly 8,000 employees will be receiving 15% pay cuts.
January 25, 2008 at 11:52 a.m. ( permalink | suggest removal )