Tuesday, November 07, 2006

The Poor Are Getting Richer (Slowly)

Everybody knows the gap between rich and poor is widening. This means that the rich are getting richer and the poor are getting poorer, right?

Wrong.

The gap is widening because the rich are getting richer faster than the poor are getting richer. "Between 1979 and 2000, the inflation-adjusted earnings of the poorest fifth of Americans increased just nine per cent; the earnings of the middle fifth rose fifteen per cent; and the earnigns of the top fifth climbed sixy-eight per cent" (Cassidy, 2006).

This makes sense-- even the poor of today look quite wealthy compared to the poor of earlier decades. The new poor have color TVs and DVD players, and floors that are not made of dirt.

The gap is widening only because everyone is getting richer, but the rich are getting richer faster.

Cassidy, J. (2006). Relatively Deprived. The New Yorker, 42, April 3, pp42--47.

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