Fri, Jan 24, 2014 - Page 9 News List

Busting the US myth of the undeserving poor and deserving rich

By Paul Krugman  /  NY Times News Service, NEW YORK

The reality of rising US inequality is stark. Since the late 1970s, real wages for the bottom half of the workforce have stagnated or fallen, while the incomes of the top 1 percent have nearly quadrupled and the incomes of the top 0.1 percent have risen even more.

While there should be a serious debate about what to do about this situation, that US capitalism as currently constituted is undermining the foundations of middle-class society should not be up for argument, but, of course, it is.

This partly reflects Upton Sinclair’s famous dictum: “It is difficult to get a man to understand something when his salary depends on his not understanding it.” Yet it also reflects distaste for the implications of the numbers, which seem almost like an open invitation to class warfare, or, if you prefer, a demonstration that class warfare is already underway, with the plutocrats on offense.

The result has been a determined campaign of statistical obfuscation. At its cruder end, this campaign comes close to outright falsification, while at its more sophisticated end it involves using fancy footwork to propagate what some think of as the myth of the deserving rich.

For an example of de facto falsification, one need look no further than a recent column by Bret Stephens of the Wall Street Journal, which first — wrongly — accused US President Barack Obama of making a factual error, then proceeded to assert that rising inequality was no big deal because everyone has been making big gains. Why, incomes for the bottom-fifth of the US population have risen 186 percent since 1979, the column said.

If this sounds wrong, it should, because that is a nominal number which is not corrected for inflation. The inflation-corrected number can be found in the same US Census Bureau table and it shows that incomes for the bottom-fifth are falling. Oh, and for the record, at the time of writing this article, that elementary error had not been corrected on the Journal’s Web site.

OK, so that is what crude obfuscation looks like. What about the fancier version?

It has been said before that conservatives seem fixated on the notion that poverty is basically the result of character problems among the poor. This may once have had a grain of truth to it, but for the past three decades and more, the main obstacle facing the poor has been the lack of jobs paying decent wages.

Yet the myth of the undeserving poor persists and so does a counterpart myth, that of the deserving rich.

The story goes like this: the US’ affluent are affluent because they made the right lifestyle choices. They got themselves good educations, they got and stayed married and so on. Basically, affluence is a reward for adhering to the Victorian virtues.

What is wrong with this story? Even on its own terms, it postulates opportunities that does not exist. For example, how are children of the poor, or even the working class, supposed to get a good education in an era of declining support for and sharply rising tuition at public universities? Even social indicators like family stability are — to an important extent — economic phenomena: Nothing takes a toll on family values like lack of employment opportunities.

Yet the main thing about this myth is that it misidentifies the winners from growing inequality. White-collar professionals, even if married to each other, are only doing OK.

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