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Robert Samuelson Touts the Sun Coming Up and Good News About the Economy

About two decades ago, when my colleagues at the Economic Policy Institute were first beginning to make serious inroads in getting the media to accept that growing inequality was a problem, there were several studies that argued we shouldn't be concerned because we had high rates of mobility. The argument was that even if a snapshot showed there was a bigger gap between the top and everyone else, this wasn't a big deal because we saw people constantly changing places in the income hierarchy. People who were in the bottom income in one decade could be in the top or fourth quintile a decade later, with those at the top often sliding down one or two quintiles.

It turned out that this result was driven by the inclusion of students in the analysis. Guess what? Many medical students and business students don't have very high incomes when they are in school, but ten years later they may be in the top quintile of income earners. Aren't you glad that we have highly skilled economists (and highly paid) to discover facts like this?

Of course, when you do the analysis seriously and just take people in their prime earning years (above age 25) there was very little mobility. People may move up or down a quintile, but very few from the bottom quintile ended up in the top or even fourth quintile.

Robert Samuelson seems to pull the same sort of trick as the mobility studied in presenting new research from Pew. Samuelson tells us that we might be "richer than we think."  He tells us of a seeming paradox.

CEPR / August 22, 2018