One of the things that has struck me, when I have gone on luxury cruise ships, is that most of the passengers look like they are older than the captain — and luxury cruise ships don’t have juveniles as captains.
The reason for the elderly clientele is fairly simple: Most people don’t reach the point when they can afford to travel on luxury cruise ships until they have worked their way up the income ladder over a long period of years.
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The relationship between age and income is not hard to understand. It usually takes years to acquire the skills and experience that high-paying jobs require, or to build up a clientele for those in business or the professions.
But those in the media and in politics who are currently up in arms, denouncing income inequalities, seldom mention age as a factor in those inequalities.
The shrill rhetoric about differences in income proceeds as if they are talking about income inequalities between different classes of people. It would be hard to get the public all worked up over the fact that young people just starting out in their careers are not making nearly as much money as their parents or grandparents make.
Differences in wealth between the young and the old are even greater than differences in income. Households headed by someone 65 years old and older have more than 15 times as much wealth as households headed by someone under 35 years of age.
But these are not different classes of people, as so often insinuated in runaway political rhetoric. Everybody who is 65 years old was once under 35 years of age. And most people under 35 years of age will someday be 65 years old.
Differences in age are just one of the reasons why the insinuations about income and wealth that are thrown around in the media and in politics are often remote from reality.
While the rhetoric is about people, the statistics are almost invariably about abstract income brackets.
It is easier and cheaper to collect statistics about income brackets than it is to follow actual flesh-and-blood people as they move massively from one income bracket to another over the years.
More important, statistical studies that follow particular individuals over the years often reach diametrically opposite conclusions from those reached by statistical studies that follow income brackets over the years.
Currently, we are hearing a lot in the media and in politics about the “top 1 percent” of income earners who are supposedly getting an ever-increasing share of the nation’s income.
That is absolutely true if you are talking about income brackets. It is totally untrue if you are talking about actual flesh-and-blood people.
I'd post this opinion piece to my Facebook page but my liberal relatives and friends won't read it. Trying to teach them economics, statistics, and common sense goes against their media generated preconceived notions.
Allan Soriano, I post everything I read to my Facebook page with opening leads from the column. You are right, the liberals or Democrats won't read them, but a few have found time to personally insult my intelligence or the column's premise, all without reading it.
Some have attacked me with vulgarity and questioned my patriotism. All without even reading it, which is what I suggest they do and then ignore their comments. This usually ends with them performing the most dreaded and feared deed of taking me off their covetable friend’s list.
Engaging in political discussion on Facebook is the equivalent to standing on your front porch and have a screaming match with your family and neighbors. All heat and no light.
I have come to believe that Luke 16:19-31 applies here as well: “But Abraham said, ‘If they won’t listen to Moses and the prophets, they won’t listen even if someone rises from the dead.’”
Dr. Sowell, I always use you as my reality check on issues that I care about. Polls and statistics to politicians are like books that have been cooked by a dishonest businessman or resumes that don't represent the reality. Democrats have shown over and over that the don't let facts get in the way of their ideology and rhetoric.
With all the facts about our current fiscal mess it is difficult for me to see how Obama can enjoy 40 some percent approval in the polls How does this square with 75% of Americans thinking that the country is on the wrong track?
The class warfare is yet another campaign tactic for Democrats to gin up support from their base which is asleep at the switch. And to find someone else to blame for our current calamity.
Don't tell anyone you are a black conservative. That alone will be reason to doubt the articles content again without actually having read let alone thought about it. Good article.
If Mr. Sowell is contending that there's an ever-changing population at the top of the economic ladder, then the CBO disagrees with him:
"Much of the movement of households involves changes in income that are large enough to push households into different income groups but not large enough to greatly affect the overall distribution of income. Multiyear income measures also show the same pattern of increasing inequality over time as is observed in annual measures."
"During recent years, when “the top 1 percent” as an income category has been getting a growing share of the nation’s income, IRS data show that actual flesh-and-blood people who were in the top 1 percent in 1996 had their incomes go down — repeat, down — by a whopping 26 percent by 2005. "
That's hardly the marginal change Dr. Krugman claims. One or the other is obfuscating.
Can you give me a good reason to trust Krugman over Sowell? Because I can't think of one.
I'm guessing Krugman's response would be, "You should trust me," while Sowell's response would be, "You should do your own research and learn to think for yourself."
Apples and oranges. The CBO comment does not refute income mobility, it merely echo's Mr Sowell's own comments about bracket "inequality". Tellingly, the external link offered by maksutov66 is not to the CBO report, it is a link to a blog by the perpetually confused Paul Krugman.
Oh, I don’t know. Two years into my first job, when I was 20, I got to go on a couple of warm water cruises from Okinawa to Da Nang, though I was making only a few hundred dollars a month…as a Marine. I have long thought that in a rational world, one would be required to read and pass a test on Dr. Sowell’s “Basic Economics” in order to hold office. Or even to vote. Politicians taking advantage of voters ignorance of economics is why we are headed for a fiscal collapse, followed by a social and political collapse. In five years, these will be the prosperous Good old Days. I will link to this from my Old Jarhead blog.
Robert A. Hall
Author: The Coming Collapse of the American Republic
(All royalties go to a charity to help wounded veterans)
For a free PDF of my book, write tartanmarine(at)gmail.com
How easy it is to fool people with so little education.
Anyone ever heard of 'regression to the mean'?
Of course the people who are at the very top in a given year will likely have their earnings dip if you follow them -- the fact that they were at the top in 1996 is because they were almost certainly having their most lucrative years of salary/bonus/business income.
Also, if you are interested in actually learning something, instead of parroting Sowell, then check out why his comments about the lowest quintile moving up are seriously flawed.
As I read the external link it basically concedes that Sowell's analysis, while not flawless, is better than the mainstream media. Which supports your post. You say, "Of course the people who are at the very top in a given year will likely have their earnings dip if you follow them." But that's Sowell's main point: most commentators don't say "of course" - they argue as if the top 1% is always the same people.
