Is inequality rising?
In short, not exactly. In this short post, economist John Taylor summarizes new research by economists David Splinter and Gerald Auten. These scholars find that the share of income going to the top 1 percent hasn’t changed much over the last half century after accounting for taxes, transfer income, and other sources of income that are not captured in official government income statistics. You can learn more about their research in this Hoover Working Group on Economic Policy seminar with David Splinter:
Is inequality the best measure of health for our economy?
Rather than focusing on relative differences in income or consumption, we should ask whether families and individuals are doing better over time. Are their incomes growing? Do they have economic opportunities?
These questions deal with economic mobility, and they get to the heart of the matter of whether our economic system is working.
In the video series America’s Exceptional Economy, economist Ed Lazear takes a look at how well the American economy is doing. He offers a positive report. Whether one looks at income growth, economic mobility, or job opportunities, the American economy receives high marks, especially relative to other advanced economies. Watch the first video of the series here to learn more: