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Who’s in the Top 1 Percent?
There’s a reason only old people go on cruises.


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Thomas Sowell

The Internal Revenue Service can follow individual people over the years because they can identify individuals from their Social Security numbers. 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.

How can both sets of statistics be true at the same time? Because most people who are in the top 1 percent in a given year do not stay in that bracket over the years.

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If we are being serious — as distinguished from being political — then our concern should be with what is happening to actual flesh-and-blood human beings, not what is happening to abstract income brackets.

There is the same statistical problem when talking about “the poor” as there is when talking about “the rich.”

A University of Michigan study showed that most of the working people who were in the bottom 20 percent of income earners in 1975 were also in the top 40 percent at some point by 1991. Only 5 percent of those in the bottom quintile in 1975 were still there in 1991, while 29 percent of them were now in the top quintile.

People in the media and in politics choose statistics that seem to prove what they want to prove. But the rest of us should become aware of what games are being played with numbers.

— Thomas Sowell is a senior fellow at the Hoover Institution. © 2011 Creators Syndicate, Inc.



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