The dirty little secret of income inequality alarmists

[Valin]

The Enterprise Blog:

James Pethokoukis
November 4, 2011


Today isn’t the same as tomorrow, particularly as it concerns economic mobility. This, from the St. Louis Federal Reserve bank:

For most people, income increases over time as they move from a usually low-paying first job to better-paying jobs later in life. Some others, however, may lose income over time due to business cycle contractions, demotions, career changes, retirement, and so on. Because incomes are not constant over time, the same households do not necessarily remain in the same income quintiles. Thus, comparing income quintiles from different years is a proverbial apples-to-oranges comparison because the households compared are at different stages in their earnings profile.

First take a look at this graphic:
(Snip)