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October 27, 2011
'7 reasons why Obama is wrong about income inequality'
James Pethokoukis at the Enterprise blog has some fascinating data on "income inequality" that the CBO numbers did not take into account when they showed the top 1% gaining 275% in wealth over the last 30 years. First, according to the CBO;s own numbers, median household income grew by 35% in that 30 year period. Median, as opposed to average, is a better indicator of top to bottom growth. Here are the other reasons: 2. The CBO fails to factor in that American households in the top income quintile have, on average, almost five times more family members working than the lowest quintile. (Analysis by AEI blogger Mark Perry.) Those folks are also far more likely, as Perry notes, than lower-income households to be well-educated, married, and working full-time in their prime earning years. Perry also notes that "individuals are not stuck forever in a single income quintile but instead move up and down the income quintiles over their lifetimes." (Indeed, a Treasury study on income mobility...(Read Full Post)