Tuesday, March 29, 2011
Many people think that the rich get richer while the poor get poorer. But when people think of the rich, they are thinking of people with great wealth, and when they think of the poor, they are thinking of people with low incomes. Wealth and income are not the same. To compound this problem, if government data is misunderstood or misused, it can lead to false conclusions.
In reality, between 2004 and 2007, approximately 1/3 of the households in the lowest income group graduated to a higher income group while 1/3 of the households in the highest income group dropped down. Another study conducted in 2007 shows that the median income of all the groups rose during a ten-year period except for that of the richest 1%.
For Americans, the famous axiom simply isn’t true, and economic mobility helps differentiate the U.S. from many other countries. “The power of the American economy is that it provides opportunity. The income mobility numbers make this abundantly clear.”
Steven R. Cunningham, Opinion: Myths About the Rich and Poor in U.S., Mercury News, Mar. 22, 2011.
Special thanks to Jim Hillhouse (WealthCounsel) for bringing this to my attention.