The Rich Get Richer...
By Amy Willis
But is that a bad thing? That may be the central question explored in this EconTalk episode with UC Berkeley’s Gabriel Zucman. Working with Thomas Piketty and Emmanuel Saez, Zucman explored national income accounts to look for trends in income inequality in the United States since 1980.Their results suggest that the bottom 50% of Americans have seen no growth in income, while a disproportionate share of growth has accrued to the top 1%. How robust are these results, and what policy implications might be suggested? And how does income inequality in America compare to that in other nations? Do you feel richer than you did in the 80s?
1. In terms of income inequality, how are average growth rates misleading about the real state of the economy, according to Zucman?
2. How does Zucman’s analysis differ from previous attempts to measure income inequality? What are the weaknesses of using tax data for such purpose? How might a cross-sectional approach yield different results regarding income inequality?3. What four causes does Zucman suggest have brought about this combination of stagnant income growth for the bottom 50% of Americans and increased income inequality? Which does Roberts give the most credence to, and why? Which do you find most explanatory, and why? Least explanatory?
4. While Zucman finds that the lower and middle classes have not experienced any income growth over the past three decades, Roberts counters that even so, they are still much better off than in 1980. How can he make that claim? To what extent does Roberts convince you?
5. Some, like John Tamny in this piece for Law & Liberty, suggest that there are indeed positive benefits to inequality. What might these be, and to what extent do you accept this argument? At what point does emulation (which Adam Smith saw a positive role for) shift from being aspirational to confrontational?