In a Wall Street Journal op-ed, economists Steve Hanke and Stephen Walters show how most Americans pay 26% less than the true cost of the government services they consume because politicians hide the true cost in long-term deficits. When taxpayers pay 26% less than the true cost of government—even less as they earn less—what incentive do they have to optimize government spending and taxes? I wrote about this in my book The Upside of Inequality (pp. 108 and 248). ... Read More
Millennial Incomes Are Comparable to Prior Generations
A new Pew study finds Millennial household incomes are higher today than they have been for every other comparable generation, except in the year 2000. Using the Pew data, Ernie Tedeschi finds Millennial household incomes today are comparable to past generations after adjusting for education. But such comparisons assume education is as productivity-enhancing today as it was in the past when America educated fewer people at the margin. Bryan Caplan, for example, ... Read More
U.S. Is Not An Outlier on Economic Mobility
Scott Winship’s indispensable review of economic mobility studies finds the “U.S. (is) not an outlier” even if absolute mobility is less because growing income gap between rich and poor “says nothing” about whether it’s harder for poor kids to become rich. ... Read More
Harvard Study Finds 11% MBTA Gender Pay Gap Despite Guaranteed Equal Pay
The WSJ reports on a study by Harvard economists, Valentin Bolotnyy and Natalia Emanuel, that finds an 11% gender pay gap—“60% of the earnings gap across the United States”— among union members of the Massachusetts Bay Transit Authority, despite rigorous seniority rules and guaranteed equal pay for equal work. The authors conclude: “The gap…can be explained entirely by the fact that, while having the same choice sets in the workplace, women and men make different ... Read More
Two charts show income inequality hasn’t risen as much as we’ve been led to believe
Two charts show income inequality hasn’t risen as much as we’ve been led to believe. ... Read More
The San Antonio Express-News’ Michael Taylor Compliments The Upside of Inequality
The San Antonio Express-News' Michael Taylor Compliments The Upside of Inequality “Conard’s book challenges some deeply held beliefs. I want people … who think inequality is a major problem to read more smart people on the other side of the debate, like Edward Conard.” Is the wealth gap really all that bad? The financial crisis wiped out trillions of dollars of savings and capital in America, sparking an entire movement against the top 1 percent of earners and ... Read More
CBO Finds Median Household Income Has Grown 51% Between 1979 and 2014
The Economist reports, “the average American is much better off now than four decades ago,” and provides useful comparison of the U.S. Census’ and the CBO’s March 2018 estimate of U.S. household income growth between 1979 and 2014. The CBO finds after-tax median household income grew 51% between 1979 and 2014 to $73,200—far higher than the flat growth reported by the Census. Unlike the Census, the CBO’s income estimate includes taxes, non-taxable income such as pension ... Read More
