by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Walter Williams uses the publication of his friend Thomas Sowell’s latest book to focus attention on the relationship between wealth and poverty. You’ll find the results of Williams’ deliberations in his latest column at Human Events.
How many times have we been told that the rich are prospering at the expense of the poor? Sowell points out that most households in the bottom 20 percent in income have no one working. How can someone who isn’t producing anything have something taken from him?
What about the supposed “paradox of poverty” in a rich society such as ours? Sowell says that this is a paradox only to those who start out with a preconception of an egalitarian world in defiance of history and have a disregard for the arbitrariness of government definitions of poverty. Poverty occurs automatically and has been mankind’s standard fare throughout its entire history. It is high productivity and affluence that are rare in mankind’s history and require an explanation. Government definitions of poverty make talking about income gaps and disparities meaningless. If everyone’s income doubled or even tripled, poverty would certainly be reduced, but income gaps and disparities would widen.
One of the biggest problems in analyzing poverty is the vision that the poor are permanently poor. A University of Michigan study followed specific working Americans from 1975 to 1991. It found that particular individuals who were in the bottom 20 percent in terms of income saw their real incomes rise at a much higher rate than those in the top 20 percent. An IRS study, covering the period from 1996 to 2005, found a similar result. Workers whose incomes were in the bottom 20 percent saw their incomes rise by 91 percent. Over the same span, those in the top 1 percent saw their incomes fall by 26 percent. The outcomes of both studies give lie to the claim that “the rich are getting richer and the poor are getting poorer.”