Economics professor Steven Landsburg writes, "By the 20th century, per capita real incomes, that is, incomes adjusted for inflation, were growing at 1.5 percent per year, on average, and for the past half century they've been growing at about 2.3 percent. If you're earning a modest middle-class income of $50,000 a year, and if you expect your children, 25 years from now, to occupy that same modest rung on the economic ladder, then with a 2.3 percent growth rate, they'll be earning the inflation-adjusted equivalent of $89,000 a year. Their children, another 25 years down the line, will earn $158,000 a year."
Yet despite this long-term, across-the-board upward economic mobility, the number of Americans who describe themselves as belonging to the "have-nots" has doubled in two decades. What does all this mean? It says that the offensive and divisive claims of an economic "societal divide" work. When Democratic presidential candidate John Edwards speaks of "two Americas," people buy into it.
The drumbeat that "race plays a part of everything in America" doubtlessly affects the vision of blacks. A 1995 poll found blacks earning $50,000 or more were less likely to say "everyone has the power to succeed" in America than low-income whites.
Edwards and his ilk yap about the gap between the rich and the poor. Yes, the rich do get richer. But so do the poor. This is really about envy. A professor who taught business students once told a story something like this. He asked his class which scenario they preferred. In the first option a country, say, Japan, grows at approximately 7 percent a year, with the United States growing at 4 percent. Option two: Japan growing at 3 percent, and the United States growing at 3 percent. Most students preferred option two, even though it meant America grew less rapidly! Students happily accepted being less well off, so long as nobody else out-gained them.
As for actual, persistent poverty, Edwards and fellow naysayers refuse to face up to a couple of things. The failure to invest in oneself -- to get at least a high school education -- increases the chances of poverty. Similarly, a child born to a poor unwed mother as opposed to a poor married couple faces a far greater chance of growing up poor. We call this behavior.
Government policies like food stamps, AFDC, day care vouchers and health-care programs reward poor behavior. This hurts, not helps, the poor. But as economic demagogues like Edwards demonstrate, terms like "economic divide" and "two Americas" make great sound bites.
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