A report from The Urban Institute shows that despite how Bernie Sanders and Hillary Clinton talk about income inequality in America, things are actually getting better for most families. Since 1979, we have more wealthier people and fewer poor and near-poor people. The middle class has become wealthier overall in the past generation, and many people who were once middle class are now upper middle class (and yes, this adjusts for inflation).
“Between 1979 and 2014, the upper middle class more than doubled in size, from 12.9 to 29.4 percent,” the report stated. “While the share of the rich grew by 1.7 percentage points, there were sizable declines in each of the lower three groups, with the poor and near-poor falling from 24.3 to 19.8 percent, the lower middle class from 23.9 to 17.1 percent, and the middle class from 38.8 to 32.0 percent.”
The Urban Institute is nonpartisan, but it was founded by Democrat President Lyndon Johnson and currently run by the former deputy director of Bill Clinton’s National Economic Council.
Interestingly, while the shift upward in terms of household economic well-being is across the board, people would be earning even more money if the Urban Institute’s calculations included some key income streams:
“As noted in the methodology section, the CPS income numbers understate various sources of income: for wealthy people, capital gains are excluded, and interest and dividend income are underreported; middle-income people are missing the value of what employers pay for their social security taxes and health and retirement benefits; and for lower- and moderate-income people, there is underreporting of pension and government transfer income plus the exclusion of the earned income tax credit and other noncash benefits, particularly Medicare and Medicaid. Overall, it is hard to know what the distribution would be if all the data for a wider definition of income were available.
In plain English: even without substantial money from both investment income for rich people and welfare programs for poorer people, Americans have become richer in the past generation. Does this mean we shouldn’t continue to fight to improve life for every American, especially the most vulnerable? Absolutely not. But does this mean the cataclysmic “crisis” that Sanders rails about is actually happening? Absolutely not, either.
richard hawley
June 24, 2016 at 7:47 pm
This is a specious and I suspect politically motivated “illustration.” OF COURSE people in all brackets have more money in 2014 than they did in 1979. The chart we need is the one showing how MUCH of the aggregate wealth is held by those in the first and second categories. That chart will show staggering inequality.
Jacob Mueller
June 27, 2016 at 11:32 am
Sure, but if everybody is better off, why care that some hold more proportionate wealth than before? Isn’t this proof that the American system of law and trade is the best for creating a flourishing society?
I think that’s the point of the chart.