Baker vs. Reynolds
By Arnold Kling
In a comment on my earlier post, Dean Baker chided me for using anecdotes rather than data to make my claim that economic suffering is overstated in the media.
Apparently, if I wanted to make my claim using data, I could buy Alan Reynolds’ new book. In a review essay, David Henderson writes,
the CBO data show that between 1979 and 2000, average after-tax income in each quintile (fifth) of the household income distribution rose. For the lowest quintile, it rose from $13,500 to $14,600 [all numbers in this sentence are in 2003 dollars]; for the second-lowest quintile, it rose from $27,300 to $30,900; for the middle quintile, it rose from $38,900 to $44,800; for the second-highest quintile, it rose from $50,900 to $63,600; and for the top quintile, it rose from $89,700 to $138,500.
In fact, this way of looking at the numbers understates the improvement. Most of the people in the bottom two quintiles in 1979 were in the higher quintiles in 2000. They had been replaced in the bottom quintile by new immigrants and young families.
I will be on travel, and posting little or nothing for the next 10 days. When I get back, I’ll try to remember to look at the rest of the articles in Henderson’s series and to check out Reynolds’ book.
UPDATE: Here is Reynolds himself.
UPDATE 2: My point about quintiles is explained here.