Fascinating Error with U.S. Wages
I’m sure you have heard the Leftist mantra before: “The rich are getting richer, the poor are getting poorer.” In fact, Robert Reich’s newest book rehashes Marx’s Theory of Capital Accumulation, which argues that too much capital is accumulated at “the top” and eventually the bottom doesn’t have enough income to purchase what the top sells. (Of course this is a simplified summary of Marx’s Theory, but that is the general idea). Some have even argued that this caused the recent recession.
Those who are familiar with Thomas Sowell know that he easily debunked this nonsense by explaining that nobody “distributes wealth” to the top income brackets. In fact, people are constantly moving up and down the statistical brackets, often with age. ( For example, young people tend to be poorer than they are when they get older and develop more skills and earn more in income. )
However, another new development may destroy Reich’s argument without even needing to address what Sowell has discussed. It turns out that:
Two people were found to have filed multiple W-2 forms that made them into multibillionaires, an agency official said yesterday. Those reports threw statistical wage tables out of whack and, in figures released Oct. 15, made it appear that top U.S. earners had seen their pay quintuple in 2009 to an average of $519 million.
The agency yesterday released corrected tables that showed the average incomes of the top earners, in fact, declined 7.7 percent to $84 million each.
This would mean that all the claims that the top X % earned “obscene” incomes while the rest of the Country did poorly, isn’t true. Incomes in fact declined for almost everyone during this recession.
This isn’t something to be happy about. But, it demonstrates that there are lies, damned lies and statistics.