Bad Numbers, Bad Policy

Arnold Kling analyzes income disparity numbers and has “a few nits to pick”. The errors cooked into the numbers seem like more than a few nits to me! Here are the two facts from Mr. Kling that should make you stop and think:

  1. New families (immigrants and young families) tend to join the income escalator at the bottom.
  2. If a household breaks into two households, due to divorce, average household income plunges by 50 percent, even though nobody’s income has changed. Trends in household income tend to look worse than trends in income per person.

Being an election year, politicians want to make you feel like you’ve been wronged and that they can fix it. Otherwise, I don’t understand the near hysterical ranting about “income inequality” and the collapse of the middle class in the absence of meaningful numbers.

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