Economists Heather Boushey of the Center for Economic and Policy Research and Russell Roberts a professor of economics at George Mason University debate income inequality in the Wall Street Journal econoblog here.
Here are some notable quotes:
First, consider the level of inequality that we can actually perceive in our daily lives, as opposed to the level of inequality that we might know from reading government statistics. I’ve had dinner with a few billionaires at various charity events. As Hemingway pointed out long ago, the rich are different from us, they have more money. But as my colleague Don Boudreaux has pointed out to me more recently, it’s striking how difficult it is to perceive the differences between us and the super-rich in the absence of reading their tax returns.
The super-rich guy at that charity dinner may have flown on a private jet, but I can afford to fly by jet, too, albeit in a coach seat. The super-rich guy may have been chauffeured to the dinner in a luxury car, but my Honda Accord is pretty quiet and comfortable. The rich guy wears a custom-made suit that may have cost over $1000. But my Lands’ End suit is 100% wool and looks pretty good. I’d have to finger the fabric of his jacket to feel inferior. Yes, his watch is more expensive. But mine probably keeps better time. Unless I stop by his house for a visit, I’m unlikely to feel the pinch of my lower income status. Compare that to 50 or 100 years ago, when the qualitative aspects of the lives of the wealthy were much more noticeable to the average person.
Without the government data that is so widely reported, how would I ever know that I’m falling behind or that the super rich or even the mere rich are racing ahead? What I really care about is whether I’m moving forward.
And this is where the government data are particularly misleading. They usually compare two snapshots at different times, and so they mask the progress the average person makes over time in well-being.
The average poor person has a washing machine, a dryer and central air conditioning. Almost two-thirds of the poor own or have access to a car. The poor’s access to what once were luxuries has improved dramatically over the last 15 years despite pessimistic claims to the contrary. On many dimensions, even access to health care, the average poor person lives better than the wealthy of the past.
Immigrants risk death for the chance to be poor here and live among people much wealthier than they are. They still think of America as the land of opportunity. I think they’re right.
The full debate can be found here.