Obama: Wrong About Income Inequality
President Barack Obama has declared that “a dangerous and growing inequality and lack of upward mobility” is “the defining challenge of our time.” Yet, Brookings Institution economist Gary Burtless has shown that from 1979 to 2010, the bottom fifth’s after-tax income in constant dollars rose by 49 percent. The incomes of households in the second lowest, middle, and fourth quintiles increased substantially as well. The poor and the middle class got richer. The numbers also show that the rich got richer too, and they got richer faster. Because of these differential increases in income, the share of pre-tax national income going to the top quintile has increased. So inequality has increased. But if most Americans’ incomes are rising, does it matter if some are getting a larger share? The real defining economic challenge of our time isn’t inequality. It’s persistent joblessness and weak economic growth perpetuated by feckless economic policies.