Income distributions and misleading poll questions (#OWS)
Disingenuous, pseudo-quantitative arguments piss me off.
In this recent Bloomberg View article entitled “Making the rich poorer doesn’t enrich the middle class,” Caroline Baum argues that middle class people would rather get more money than take away money from rich people. From the article:
Polling by the Pew Research Center shows that people aren’t interested in taking money from the wealthy. They just want a chance to get rich themselves.
But that’s a misleading question. It seems like a zero sum game when you put it that way, equivalent to something like, “Would you rather gain $100 or have a rich person somewhere lose $100?”.
But if you pose the question differently, and more in line with actual numbers, not to mention contextualized to reality in other ways, then you’d probably get the opposite.
Let’s take a look at wealth distribution from 2007, which I got here:
Let’s just say we’re being extreme and we take away all the wealth of the top 1% and give it to everybody equally (say we even give back some of it to those top 1%). That would mean that 34.6% get flattened out to 100 pots instead of one, which means that each of those percentiles gets about 0.35% more than they used to have. The middle 20% would grow from 4% of the overall wealth to (4 + 20*0.35)% = 11%. That’s still a lot less than 20%, but the wealth of the middle 20% is still nearly tripled by just this one percent re-distributing.
Said another way, it’s not tit-for-tat at all.
If we asked someone in the middle class which they want more, a 1% increase in their wealth or a top 1%’er to lose 1% of their wealth, then that might be very different. Consider the political influence that 1% represents, at the very least. Consider the fact that 1% of that person in the middle 20% is 173 times smaller than for the top 1%.
It’s still not fair, though, because the middle class is so squeezed on necessities like food, housing, education, medical expenses, and child care, that they can’t afford even a 1% loss. What if you took those out?
If you go even further and ask someone in the middle class which they want more, a 1% increase in their discretionary income or a top 1%’er to lose 1% of their discretionary income, then that might be very different still. I haven’t been able to find a similar graphic to work with to see the discretionary income distribution, but rest assured it’s even more unbalanced.
Caroline Baum, would you care to cover those questions on your next poll to the middle class?