November 13, 2007 by Tom Armstrong.

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November 13, 2007 by Tom Armstrong.

I asked for comments on my “Income gap grows between black, white?” post, and here is a comment (the original post was today, which is a few posts down):

What makes you so skeptical of the information? It’s no surprise to me. I mean most white families look out for their own financially more than blacks do. Of course thats mainly because there are more better off whites than blacks. Many blacks are quick to kick their kids to the curb at 18. We dont stick together financially, we usually pull away from each other and try to do it on our own.When we go to college we’re usually under financial aid or many middle income blacks have only partial financial aid as I did because their parents make just a little too much to get full aid but not enough that its not going to hurt. My main thought though is why do you find it hard to believe? Do you really think that we’re actually on a 100% level playing field only 40 years out of the civil rights movement? We do what we have to to survive and that’s why you see so many of us in jail because of what we have to resort to. The smart ones such as myself and plenty others who are raised in decent homes, get educated, get a career and become a part of that statistic that does better than their parents. Unfortunately we’re the minority as most are doing the opposite and keeping our society and the black race from faster progression.

Remember, this is not a black/white issue for me; its a statistical issue. Something tells me blacks have progressed significantly in the past several decades. Granted, my evidence is anecdotal at present, but I will work on finding some empirical data. I recall reading some evidence from Dr. Sowell; I’ll try to find it. Thanks for the comment.

One hour later, I’ve found what I recalled reading in Sowell’s Basic Economics, which, by the way, is an excellent introduction to economics, meant for a general audience. Here is what Thomas Sowell says in Chapter 9, “Productivity and Pay:”

Perhaps the most radical difference between individual and family or household statistics are those used when comparing different American racial or ethnic groups. For example, real income per black household rose only 7 percent in the two decades from 1967 to 1988, but real per capita income among blacks rose 81 percent over those very same years. Average black household size was simply declining during these decades, so that a substantial increase in real income per person appeared statistically as a trivially small increase per household. Moreover, because black household size was declining more sharply than white household size, black incomes appeared to be falling behind white incomes when household statistics were used, but were in fact rising faster than white incomes when individual statistics are examined.

Thomas Sowell lists his sources, as well. For those interested, I highly recommend the book.

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November 13, 2007 by Tom Armstrong.

Greatest song ever!

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November 13, 2007 by Tom Armstrong.

This appears in the WSJ today. Notable:

If you’ve been listening to Mike Huckabee or John Edwards on the Presidential trail, you may have heard that the U.S. is becoming a nation of rising inequality and shrinking opportunity. We’d refer those campaigns to a new study of income mobility by the Treasury Department that exposes those claims as so much populist hokum.

OK, “hokum” is our word. The study, to be released today, is a careful, detailed piece of research by professional economists that avoids political judgments. But what it does do is show beyond doubt that the U.S. remains a dynamic society marked by rapid and mostly upward income mobility. Much as they always have, Americans on the bottom rungs of the economic ladder continue to climb into the middle and sometimes upper classes in remarkably short periods of time.

The Treasury study examined a huge sample of 96,700 income tax returns from 1996 and 2005 for Americans over the age of 25. The study tracks what happened to these tax filers over this 10-year period. One of the notable, and reassuring, findings is that nearly 58% of filers who were in the poorest income group in 1996 had moved into a higher income category by 2005. Nearly 25% jumped into the middle or upper-middle income groups, and 5.3% made it all the way to the highest quintile.

Of those in the second lowest income quintile, nearly 50% moved into the middle quintile or higher, and only 17% moved down. This is a stunning show of upward mobility, meaning that more than half of all lower-income Americans in 1996 had moved up the income scale in only 10 years.

Also encouraging is the fact that the after-inflation median income of all tax filers increased by an impressive 24% over the same period. Two of every three workers had a real income gain–which contradicts the Huckabee-Edwards-Lou Dobbs spin about stagnant incomes. This is even more impressive when you consider that “median” income and wage numbers are often skewed downward because the U.S. has had a huge influx of young workers and immigrants in the last 20 years. They start their work years with low wages, dragging down the averages.

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November 13, 2007 by Tom Armstrong.

Goldberg says democrats treat wealthy Americans as a renewable resource that can never be exhausted by taxes. I believe Ayn Rand wrote a little book that dealt, in part, with this topic.

Notable line from the article:

According to Democrats, it’s greedy to want to keep your own money, but it’s “justice” to demand someone else’s.

Not to say the typical Republican is any better.

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November 13, 2007 by Tom Armstrong.

Russell Roberts writes a good article on why we trade.

Check out some of Russell’s other fine pieces here.

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November 13, 2007 by Tom Armstrong.

This appears today by The Associated Press’s Stephen Ohlemacher:

In 2004, a typical black family had an income that was only 58 percent of a typical white family’s. In 1974, median black incomes were 63 percent those of whites.

O.K., so he’s telling us whites have been doing better than blacks. But have they? The above does not really tell us much. It concerns family (household) income, not individual income. Are the sizes of the families consistent over time? I doubt it. Can it be that the incomes of blacks have risen relatively faster than whites, prompting some black family members to acquire their own households, resulting in less people per black household, and thus less household income? Somehow this makes more sense to me than suggesting somehow it is the fault of society.

Unfortunately, I am not a professional economist, so I can’t quickly find the information I need. I’m sure I can find it in the Statistical Abstract of the United States or in Income, Poverty and Health Insurance Coverage in the United States 2006 (CPR), but that’s a lot of data to sort through. I’ve tried a quick Google search and found nothing on changing household size over the past several decades. Does anyone deal with this topic on a regular basis? Anyone know where to look?

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