Income Disparity

The proposition that "the rich are getting richer, the poor getting poorer, and the middle class is getting screwed" is one that has a seductive intellectual appeal to me. If it is true, it is surely the result of the socioeconomic elite of society constructing various mechanisms of income redistribution to favor themselves -- the real Golden Rule.  This notion appeals to my inner Cynic and makes him feel smug and correct and pleased with himself.  It's when I feel the tug of that kind of seduction that I put up my guard about falling into unwarranted assumptions, a trap about which I entertain no illusions of invulnerability.

I don't question that there is a wide gap between rich and poor. That's obvious. What I'm wondering is whether there really is a widening gap between rich and poor.

I keep on hearing reports about "the widening gap between rich and poor" and I've heard such reports for more than my entire adult life. If the doomsayers about this had been right the first time I'd heard it, by now I'd either be a multi-millionaire living in a gated estate with armed guards on patrol while I lolled about in Pablo Escobar-like luxury, or a homeless welfare recipient wearing fingerless gloves sleeping in a refrigerator box. As it turned out, I'm pretty much in the same sort of middle-class economic situation that my parents were in when they were at my age. I imagine that's true for most of you Readers, too, with varying degrees of comfort encompassed within that broad and admittedly ambiguous phrase "middle-class."

And in my law practice, I've encountered some very rich people and some very poor people. But mostly, I encounter people both professionally and socially whose economic situations are better than missing meals for lack of money but not comfortable enough to take spur-of-the-moment intercontinental vacations. Oh sure, maybe we could come up with other and more precise ways of defining what "middle class" means than that but exactly what multiple of the poverty line or what precise indicator of wealth we might pick isn't really what I'm talking about here.

I have no real way of gauging whether there are more of the very rich and more of the very poor than there ever were. Even a casual look at history informs us that there have always been very rich people and very poor people, and that there have always been lots more poor people than rich people, and that individual members of the middle class have always lived in a state of anxiety about lacking the generational wealth of the rich and fear of sliding into the grinding poverty of the underclass. "Thus it ever was," and there is no indication other than "thus it shall always be."

Now, I realize that both the very rich and the very poor have a tendency to be socially invisible and segregated from the middle-class society with which I am familiar. And the very nature of social class is that one rarely encounters people outside of one's own stratum. So this may be the sort of phenomenon that eludes casual observation and only reveals itself to careful study.

A survey of studies leaves me thinking that methodology and definition are hardly uniform, in part because any attempt to split all of society into three classifications necessarily involves making some arbitrary decisions about what "wealth" and "poverty" actually mean; they rarely take into account regional disparities in purchasing power, income, and accumulation of capital; do not consider that the idle rich represent huge accumulations of capital and thus material comfort even though "income" is low; and are all colored by the partisan politics of the day.  For at least two generations, whatever party is not in power in the White House has claimed that the party that is in the White House is trying to "squeeze the middle class" and if that's the case, then middle-class taxpayers have been under the government squeeze since Harry Truman said the buck stopped at his desk. And in fact, a study of tax patterns reveals that a typical middle-class taxpayer has been functionally the same since the end of the Great Depression.

Even if income disparity is actually increasing, query as to its real-world consequence. The middle class (broadly-defined) in the USA is an overwhelmingly large segment of our society. If a few people get squeezed in to the margins of the "rich" and a few more get squeezed into the margins of the "poor" every year, well, that really sucks for you if you're on the downward slope.  But considering society as a whole -- so what? There is upward and downward economic mobility in this country, perhaps less than we might idealistically think, but it is there and it doesn't seem to affect things very much one way or the other when you look at the big picture.

So in comparing the appealing proposition to my actual experience, I have to come down on the side of skepticism as to increasing income disparity. And I'm not sure that it's as big an issue as those who point to it claim it really is, at least when you look at the macro-economic picture of the country as a whole.  Since I realize there may be more to this than I can observe myself, this is a tentative skepticism, which can be convinced either way. But for now, I'm going to classify myself as an income disparity skeptic.