Americans are breaking out of middle class; liberals, media hit hardest

In 2000, the percentage of wage earners making more than $150,000 per year was 0.8, according to the Washington Post. In 2018, the percentage was 4.2.

Even allowing for inflation, this is a good news. It suggests that plenty of folks are moving on up from the middle class.

However, the Post isn’t writing a success story. Instead, it’s fretting about income inequality and the inability to measure it.

The problem, you see, is that the Bureau of Labor Statistics and the Census Bureau don’t differentiate among wage earners making more than $150,000 per year. All such workers are recorded as making exactly that much money. Thus, the full extent of their wages isn’t measured and increases in wage inequality, if any, cannot accurately be measured.

I have no problem with the argument in favor of providing somewhat more granular data on high-end wages. But it’s unfortunate that left-liberal organs like the Post are obsessed with inequality to the point that we only read good news about wage growth in an article called “Income inequality is rising so fast that federal data can’t keep up.”

The title is misleading. Federal data could keep up simply by changing methodology. Moreover, the decision not to change methodology doesn’t mean inequality is growing “so fast.” It just means we can’t accurately determine its pace. Capping measured earnings at $150,000 is problematic whether income inequality is rising, falling, or staying the same.

What’s happening at lower income levels? Adjusted for inflation, the median worker’s hourly wage rose by 7 percent during the period 2000-2018, says the Post Wages for the top 5 percent of earners rose by 25 percent.

So wage inequality is increasing, but real wages are increasing for the median worker, albeit not as fast as we would like.

For me, the most useful information about the growing wage gap would focus on the personal characteristics of the wage earners whose incomes are growing the fastest. What fields do they work in? What level of education have they attained? In what parts of the country do they live? Are they married?

But all the Post tells us is that the prospering wage earners are, for the most part, white and male. There’s nothing anyone can do about one’s lack of “whiteness” and only extreme measures can offset one’s lack of “maleness.” By contrast, people have real control over their educational attainment, the field they work in, where they live, and their marital status.

When it comes to wage increases, some of us, instinctively, would like to see either (1) all incomes rising in lockstep or (2) incomes rising faster for low earners. But it would take a considerable, and to my mind unacceptable, level of government intervention and loss of economic efficiency, to arrange it so that less skilled and less educated keep pace with other workers in a modern economy.

The Post cites data showing that increasing the minimum wage helps reduce the wage gap. I suppose that’s true by definition. But the Post doesn’t consider the countervailing reality that increasing the minimum wage tends to reduce the number of wage earners.

The Post concludes that “rising inequality is primarily a function of what’s happening at the top of the wage distribution, rather than the bottom of it.” As long as that’s the case — as long people at the bottom aren’t losing income — I don’t know why we should be concerned.

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