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AT ISSUE
- June 2003
Work Pays Those for whom indignation is a way of life often inform us of the fact that families or households in the top 10 or 20 percent in income make far more money than people in the bottom 10 or 20 percent. Yet if the full facts were brought out, they would completely undermine the picture presented by the envy zealots or, as they prefer to be called, advocates of “social justice.” Despite the looseness with which the term “rich” is thrown around – as in “tax cuts for the rich” – most people to whom that term is sweepingly applied are far from being rich. Whether you are rich or not depends on your wealth, not your income, but the statistics used by the envy zealots are almost always income statistics. These are also usually statistics about family income or household income, which can be very misleading because families and households differ substantially in size. There are more than 19 million people working in households with incomes in the top 20 percent. Among households in the bottom 20 percent in income, there are more than 13 million people who do not work at all and fewer than eight million who do work, counting both full-time and part-time workers. How much of an injustice is it that people who work get more money than people who don’t work? It may not be a breakthrough on the frontiers of economics to say that work pays, but it does. Studies that follow the same individuals over time have found that those in the top 20 percent and those in the bottom 20 percent are mostly the same people at different stages of their lives. Not only does work pay, but when you have worked a longer time, it usually pays more! What does it take to reach top 20 percent? In 2001, it took a little less than $85,000 – for a whole household! To reach the top five percent, you need an income of about $150,000 – again, for a whole household. These publicly available
numbers may be surprising news to some because neither in the media
or in academia do the envy zealots like to talk about actual dollars
and cents. Or about work – one of the few four-letter words that
remains taboo. They prefer to talk about percentage shares going to
some people versus others. But people do not live on percentages. They
live on money and on the things that money can buy, which is to say,
their real income. |
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