...the income of the upper 1-20% is gaining at a faster rate than the incomes of the lower classes at the expense
Probably true.
at the expense of the lower classes
Not true. In fact quite the opposite. Cut out the actions of the wealthiest and the poor and middle class will suffer. Their wealth gain isn't at the expense of less wealthy people but rather serves to benefit less wealthy people.
How does Reynolds know it's false? He claims CBO estimates go back only to 1979, not 1973. Do we know know if the CBO was the source of Krugman's data? We don't.
From Krugman's article -
"...Now they're back. According to estimates by the economists Thomas Piketty and Emmanuel Saez--confirmed by data from the Congressional Budget Office--between 1973 and 2000 the average real income of the bottom 90 percent of American taxpayers..."
thenation.com
Also income rose in inflation adjusted dollars for all quintiles from 1979 to 1973. Unless it fell off the cliff from 1973 to 1979 Krugman would be wrong. And if it did fall off a cliff during those years, then it hardly makes sense to use that fact to bash Bush, or even Reagan. Maybe you could blame the oil embargo, Nixon's wage and price controls, the loose money and inflation of the 70s, Carter's policies, whatever, but it wouldn't have much to do with Krugman's targets. The observed reduction (if it was observed at all) happened in a small part of the whole range of years Krugman mentions. If income has risen across the board since 1979 but it fell off a cliff in the 70s, then Krugman should reasonably talk about how if fell off the cliff during the 70s. But he'd rather attack Republican presidents.
Let's move on.....Reynolds describes the changes in income per quintile from 1979 to 2000. He claims that these changes prove that the lowest quintiles are not experiencing wage stagnation. Well he did prove that argument but then that was his strawman argument.
Hardly a strawman, since Krugman, and many others are claiming that the lowest quintiles are expericing stagnation, or even reduction in income. If you want to abandon that and say they did poorly during the 70s, maybe you are right, but if so that doesn't have a lot to do with current policy debates.
It sure looks to me like that highest quintile is kicking the piss out of the lower quintiles but then that's just me.
Yes they are getting richer faster. But as long as every group is getting richer that's hardly a major problem.
One weakness of Reynolds's argument (that you don't mention) is that looking at quintiles doesn't tell you how the very poorest, the poorest 5% or 1% are doing. They might be doing very poorly, but if the rest of the lowest quintile is doing ok, the average for the whole quintile will be ok. But its not a huge weakness, since the point is that income for the non-wealthy is growing. Whether it is also growing for the poorest of the poor is a different question, and strategies for dealing with a stagnation or decline in the incomes of the poorest 1% are going to be different than strategies for dealing with a more wide spread stagnation. Esp. since the people in the poorest 1% change. Many of them are relatively recent illegal immigrants. |
