Here’s a comment I posted in response to an article in The Economist, “The 99 Percent”:
It’s surprising, and encouraging, to see that the income of even the lowest quintile rose over the past 30 years. You’d think with the millions of low-skilled, non-English-speaking immigrants pouring in, the income of the lowest quintile would have declined, since income inequality is mainly a function of differences in education/skill level. The question is, will rising incomes of even the lowest quintile be a thing of the future, as it was of the past?
If it doesn’t last, it certainly wouldn’t be the fault of the top 1 percent. If wages of the lowest-income groups decline, the culprit would be an oversupply of low-skilled (many of whom are non-English-speaking) labor.
Meantime, if everyone’s incomes go up – as has happened over the past 30 years – then that’s a good thing. Only the envious are troubled by the fact that the incomes of the rich have risen faster than everyone else.
If you earn $20,000 a year, and your real income goes up to $25,000 a year, that’s good, right? But what if you hear that someone else’s income goes from $100K to $150K? If you’re the envious and resentful type, you’d be troubled. If you’re emotionally mature, you wouldn’t be troubled.
Moreover, rising incomes of the rich isn’t happening at the expense of everyone else (except perhaps in the case of those who get their wealth through wealth coercion as opposed to wealth creation, such as certain members of the legal profession). It isn’t a zero-sum economy. It’s a positive-sum economy where many wealth creators get rich themselves, and in the process make everyone else’s life better through life-enhancing products (software, electronics, appliances, foods, etc.) and services. So the top 1 percent not only provide the jobs to the 99 percent, but also the life-enhancing products.
Factors causing the 1 percent to get richer faster include globalization, where markets are now much bigger than they were in the past and where one can therefore sell many more products than before. Another factor is population growth – now there are 7 billion of us. If you make an inexpensive product costing $1 and sell it to just one-seventh of the population, you’re a multi-millionaire, perhaps a billionaire if your costs are low.
Is it the top 1 percent’s fault that powerful forces such as globalization and population growth are changing the income dynamics?
The enviers want to raise taxes on the rich in order to try reverse the income inequality statistics. But the rich provide the jobs. They provide the products that enhance our lives. They provide the money so that we can get loans to by cars, homes, and education.
Punish the rich, and you punish us all.
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