March 10, 2016
Wealth inequality has become the new cause celebre in public discourse, but often inequality facts become fiction and conclusions become oversim plifications. Consequently, we may risk of embracing growth-stifling attitudes.
During the annual Davos Economic Forum in Switzerland, the Oxfam think tank published statistics according to which the world's richest 62 people own as much as wealth as the poorest 3.6 billion. At its face value, this revelation appears to be shocking. That is, until you examine the argument more carefully.
Last but not least, Oxfam's claim ignores income bracket mobility, which in the U.S. is far from stagnant or fixed. In fact, Thomas Hirschl from Cornell University shows how 12 percent of the U.S population will be in the top 1 percent bracket for at least a year. Furthermore, 39 percent will be part of the wealthiest 5 percent, and 56 percent will be in the top 10 percent income group at least one year. Most importantly, 95 percent of the people at the bottom income bracket are not there during a 15-year timeline. (Reported in nytimes.com/2014/04/20/opinion/sunday/from-rags-to-richesto-rags.html?_r=0.)
In the light of such undisputed evidence, it appears that Oxfam's claims are more about opportunistic politics than sound economics.