Ever since the Occupy Movement in late 2011, income inequality has become one of the most talked about issues among liberal pundits and politicians. How often have you seen a headline about the “rich getting richer and the poor getting poorer” or the “shrinking middle class”?
In an op-ed he authored for the Boston Globe, Democratic presidential candidate Bernie Sanders writes that “Despite an explosion in technology and a huge increase in worker productivity, the middle class continues its 40-year decline. Today, millions of Americans are working longer hours for lower wages and median family income is almost $5,000 less than it was in 1999.”
A central flaw in the inequality debate is the old “fixed pie” fallacy – that societal wealth is fixed and one can gain only at the expense of another. Of course, if it were true that wealth was fixed that would imply that people today are no richer than they have been at any point in human history – an obvious falsehood.
The only statistic Sanders cited in the paragraph quoted that’s correct is that median family income has dropped since 1999 (which you can thank Obama for). His claim about American workers working longer hours than ever is patently false. Average annual hours worked per worker has seen a steady decline from over 2,000 hours a year in 1950 to under 1,800 today.
What I want to address is a claim Sanders made that we’ve all heard from one politician or another, regardless of their political party, that the middle class is shrinking. It’s one of those claims that a fact-checker should rate “half-true.” While it’s technically true, as three charts from Dan Bier at the Foundation of Economic Freedom show, the middle class is shrinking because people are getting richer, not poorer.
The rich are getting richer – and so are the rest of us.
About Analytical Economist
The Analytical Economist is a freelance financial, political, and economics writer. His work has appeared in a variety of publications, including National Review, the Foundation for Economic Education, Ludwig von Mises Institute, among many others.