Friday, July 17, 2015

America’s middle class, if disappearing, is doing so by moving into the upper classes

See Objective Journalism? by Donald J. Boudreaux.

"Here’s a letter to the New York Times:
Eduardo Porter opens his column today by asking “Could President Hillary Clinton restore the American middle class?” (“Sizing Up Hillary Clinton’s Plans to Help the Middle Class”).
Mr. Porter illegitimately presents as an established fact a proposition that is anything but.  It’s true that between 1967 and 2009 the percent of American families with annual incomes between $25,000 and $75,000 (in 2009 dollars) fell from 62 to 39 – a fact that, standing alone, might be interpreted as evidence that the middle class is disappearing.  Yet this fact does not stand alone, for it’s also true that the percent of families with annual incomes lower than $25,000 also fell (from 22 to 18) while the percent of families with annual incomes of $75,000 and higher rose significantly – from 16 to 43.*
So given these Census Bureau data – which are strong evidence that America’s middle class, if disappearing, is doing so by moving into the upper classes – to ask if President Hillary Clinton could restore the American middle class is to ask if she will make the bulk of today’s prosperous families poorer rather than richer.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030
* Remember: These income figures are all in constant (2009) inflation-adjusted dollars.
I’ll bet that if any sizable number of Ms. Clinton’s proposed policies are enacted, she will indeed restore the American middle class – and most typical Americans would be poorer in consequence.
….
Note also Porter’s journalistically dubious ploy of asserting that raising the minimum wage has “a solid track record of research on [its] side.”  There are indeed some studies that find that raising the minimum wage does not reduce the employment of low-skilled workers, but there’s also a great deal of research that finds just the opposite.  It is, at best, a sloppy error for Porter to report the status of this research into the employment effects of minimum-wage legislation as if it is pretty much a settled matter that raising the minimum wage is a good way to boost the incomes of low-income families.
(Question: Because I know from my professional activities that this sort of description by the media of research on the minimum wage is unquestionably biased, what reason have I – who am not a climate scientist – to trust descriptions by the media of research on climate change?)"

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