Media Reality Check
  Notable Quotables
  Press Releases
  Media Bias Videos
  30-Day Archive
  The Watchdog
  About the MRC
  MRC in the News
  Support the MRC
  Planned Giving
  What Others Say
  Take Action
  Gala and DisHonors
  Best of NQ Archive
MRC Resources
  Site Search
  Media Addresses
  Contact MRC
  Comic Commentary
  MRC Bookstore
  Job Openings
  News Division
  NewsBusters Blog
  Business & Media Institute
  Culture and Media Institute

Support the MRC


What The Media Tell Americans About Free Enterprise

Tell a friend about this site

November 1996


A Class Warfare Primer
Guest Editorial, by Stephen Moore

As part of its widely publicized series entitled "America: Who Stole the Dream," written earlier this fall by reporters Donald L. Barlett and James B. Steele, the Philadelphia Inquirer prepared an "Economic I.Q. Test" for its Web site.

The 31-question true-false test has one not-so-subtle theme: the rich are making out like bandits in the economy of the 1990s while the rest of us struggle from paycheck to paycheck. The results of the "I.Q. Test," like the series itself, paint a bleak picture of America by suggesting that:

1) The rich are hoarding America's wealth at a record pace.

2) The U.S. has the most unequal distribution of income of any industrialized nation.

3) "Mass immigration" and free trade are pushing down the wages of low-income Americans. (Why immigrants would even want to come to such an awful country in the first place is never explained.)

4) The super-rich don't pay much in taxes at all.

And on and on. The very first question sets the tone. "True or false. The richest Americans are accumulating more wealth these days at the fastest rate since the robber-baron era?" Answer: "True."

The quiz fits neatly with the overriding thesis of the entire series: that the poor are poor because the rich are rich. The implicit remedy: class warfare legislation.

But it turns out that the 31-question "test" is filled with far more damn lies (or at least distortions) than statistics. So before journalists jump on the populist "greed and envy" bandwagon, they may want to at least consider some of the countervailing (and often very surprising) facts about income distribution, wages, and who pays the taxes in the contemporary American economy.

Fact #1: The wealthiest five percent of Americans earn a smaller share of the nation's total income today than they did in 1960, 1950, 1940, and 1930. Today, the top five percent have 19 percent of total income. That percentage ranged from 20 to 26 percent between 1930 and 1960.

Fact #2: Despite some minor fluctuations up and down, the income share of the middle class (those with incomes in the middle 60 percent of the distribution) has held remarkably steady at between 47 and 53 percent of the total income since the mid-1930s. America's great middle class is not disappearing.

Fact #3: As a share of total national income, the richest one percent of Americans earn 15 percent of the total. But they pay fully 28 percent of the total income taxes collected.

Fact #4: Even if the government confiscated every penny earned by Michael Jordan, Madonna, Bill Gates, and every other millionaire in the United States, this would only raise enough revenue to keep the federal government operating for six weeks.

Fact #5: The average hourly manufacturing wage in America today is $12.50. Including benefits, total hourly compensation exceeds $18 an hour. Adjusted for inflation, that is at or near an all-time high. It is true that compensation for European manufacturing workers is higher, but those jobs are rapidly disappearing in Europe and unemployment rates are in double digits there.

Fact #6: A family that was in the poorest 20 percent of income in 1979 was more likely to have moved all the way up to the richest 20 percent by 1988 than to still be poor. The United States is not a caste society. The poor today are not typically the poor tomorrow.

None of this is to claim that the American economy always produces "fair" outcomes. It is true that over the past 20 years, the disparity in income between rich and poor has widened somewhat -- but not greatly.

It is also true that as we move toward an ever-more-globalized economy, wealth distribution can be expected to grow somewhat more unequal -- even as the nation as a whole grows more prosperous.

Capitalist economies -- today, as always -- create winners and losers. But we are far from a "winner-take-all" society. Economic winners like Bill Gates, Andrew Grove, or the Sam Walton family have created vast wealth for themselves, but also for untold thousands of other Americans, while creating good jobs for thousands of others. If this is what the Inquirer has in mind when it refers to the robber barons, America needs more of them, not fewer.

To help the poor succeed in our new-age economy, we need more wealth and opportunity, not more of the greed and envy promoted by the Philadelphia Inquirer.

Stephen Moore is director of fiscal policy studies at the Cato Institute in Washington, D.C.


Rich Noyes


Home | News Division | Bozell Columns | CyberAlerts 
Media Reality Check | Notable Quotables | Contact the MRC | Subscribe

Founded in 1987, the MRC is a 501(c) (3) non-profit research and education foundation
 that does not support or oppose any political party or candidate for office.

Privacy Statement

Media Research Center
325 S. Patrick Street
Alexandria, VA 22314