One of the lines that Senator Bernie Sanders uses often in his campaign is his concern that “the rich get richer, and the poor get poorer.” Since he and other candidates will continue to proclaim this slogan, it’s worth taking a moment to critique it.
While it is true that the rich are getting richer, it is NOT true that the poor are getting poorer. Let’s put both economic figures on the table for America. In a recent video, John Stossel estimates that the wealth of the richest people doubled over the last four decades. But it is also true that poorer Americans got 32 percent richer during that same period of time. You may have read different statistics, but they all are about in the same order of magnitude so let’s assume they are close to accurate.
A good question might be: Why worry when some people get richer since poor people are also doing better? Sure, the percentages are different, but shouldn’t we applaud the fact that a rising tide floats all boats? And let’s look worldwide. In previous commentaries, I have documented the fact that one billion people have been raised out of extreme poverty.
A corollary to this slogan is the claim being made that there is a “lack of income mobility.” Certainly, there is some truth to that. Children born to rich parents have a better advantage than children born into poverty. But we are not locked into an economic class.
Economists at Harvard University and the University of California at Berkeley found that the richest fifth of Americans fell out of the bracket within 20 years. And those born to the poorest fifth climb to a higher quintile, sometimes even to the top. Look at the Forbes richest list, and you will find self-made billionaires who didn’t inherit money.
My point is simple: these campaign slogans sound true and reasonable until you look at some of the economic studies.