On April Fools’, Senator Bernie Sanders (Loonbag-VT) demonstrated that he’s the perfect mascot for the day with this tweet:
38 years ago, the top 0.1% owned about 7% of our nation’s wealth. Today, that same 0.1% owns 22% of the wealth.
— Bernie Sanders (@BernieSanders) April 1, 2017
The implication here is obvious: something horrible has happened, rich people are getting richer, everyone else is getting poorer, and things were better 38 years ago.
That’s ridiculous.
Here are seven reasons why.
1. There Is No Such Thing As The “Top 0.1%.” Sanders and others on the left like to make it sound as though there is a tiny oligarchy of uber-wealthy people who earn all the money in the United States year after year, siphoning income to themselves while sucking out of the pockets of others. That’s nonsense. The constituency of the top earners in the United States changes dramatically year after year. For example, for those in the top 1 percent in 1996, incomes decreased by 26 percent by 2005. In other words, those people largely dropped out of the top 1 percent. As Thomas Sowell writes: “A University of Michigan study showed that most of the working people who were in the bottom 20 percent of income earners in 1975 were also in the top 40 percent at some point by 1991. Only 5 percent of those in the bottom quintile in 1975 were still there in 1991, while 29 percent of them were now in the top quintile.”
2. The Upper Middle Class Has Wildly Expanded. While both sides of the political aisle repeat the myth that the middle class has fallen apart in the last few decades, it hasn’t. In 1967, 22 percent of Americans made an inflation-adjusted income of less than $25,000; 61.8 percent of Americans made between $25,000 and $75,0000; 16.3 percent of Americans made an inflation-adjusted $75,000 per year or more. By 2009, 43.2 percent of Americans made between $25,000 and $75,000 – but 39.1 percent of Americans made over $75,000, and just 17.8 percent made less than $25,000. Overall, the upper middle class grew from 12 percent of Americans in 1979 to 30 percent as of 2014.
3. Income Has Not Stagnated For Americans. While some wrongly claim that income has stagnated for the “bottom 90 percent of earners” since the 1970s, that’s not true. As Scott Winship of The Brookings Institution writes, “From 1967 to 1979, median household income grew by $5,500. This understates income growth during this period because it does not incorporate non-cash public transfers like food stamps, Medicaid, and Medicare and does not include fringe benefits or realized capital gains (such as from the sale of a home). From 1979 to 2009, we can use improved estimates from the Congressional Budget Office that combine the CPS data with tax return data to partially fill these gaps. CBO indicates that median household income (before taxes) rose by $14,200. After taxes, median income rose by $17,600. At a minimum, therefore, median household income rose by $20,000 from 1967 to 2009.”
4. Income Mobility In The United States Remains High. It is a lie that income mobility in the United States has stagnated. It’s just that people are making decisions that cause more income immobility, such as having children out of wedlock. When we adjust for those decisions, we actually find that the United States is on par with European countries with far more redistribution of wealth in terms of income mobility – and over time, intergenerational mobility has actually increased slightly in the United States over past generations.
5. Global Poverty Has Dropped Dramatically. In 1981, 44.3 percent of the global population lived on less than $1.90 per day; in 2015, the global extreme poverty rate dropped below 10 percent. That’s thanks to the rise of global capitalism and free trade, not redistributionism.
6. Life Expectancy In The United States Has Risen Dramatically. While Sanders decries the top 1 percent as the source of suffering, life expectancy has risen across the board in the United States over the past four decades. In 1979, average life expectancy was 73.9 years; today, it’s 78.9 years old. And remember, that figure includes all the premature death thanks to self-inflicted health problems, car accidents, and homicides. In the United States, we have the world’s top life expectancy from 1980 to 1999 without fatal injuries.
7. Living Standards Have Risen Dramatically In The United States. Remember the gas lines of 1979? How about lack of air conditioning, landlines, lack of personal computers, living spaces? All of our living standards are much higher now than they were 38 years ago thanks to technological development and capitalistic competition. The average poor person in the United States is rich by global standards: the majority have computers, virtually all have televisions, more than 80 percent have a Tivo, all have refrigerators and microwaves. And pretty much everybody has a cellphone, too.
So no, Bernie, 1979 wasn’t a better time. You’re just lying.