Development Economy

Income mobility or stickiness? (Horwitz, Reich and Pew)

Here is a playlist of three 3-minute videos with different perspectives on inequality and income mobility. In the first video, Steve Horwitz argues two things:

  1. All is well because the real income levels of the poorest 20% of Americans have risen over time (even if not as fast as the top 20%). Here’s a counter-argument: Robert Reich argues that even if some of the growth has been captured by the poor, inequality is what we should be worried about (see second video in the playlist). Also, Horwitz talks about the top 20%; yet, there are many outliers in that income bracket (see The top 1% (Fault Lines) or The 99.99% versus the 0.01% (The Guardian)).
  2. The individual households that comprise the bottom income bracket do not stay the same. According to Horwitz, the majority of Americans in the poorest 20% become wealthier over the course of their lives. Here’s a counter-argument: Pew Charitable Trusts show a different perspective where both the rich and poor are stuck at the ends (see third video in the playlist).

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