Letter to the Editor in today's WSJ (HT: Don Bourdreaux):
Professional Women Drive More Families Into Top 1%
In regard to the appearance of French economists Thomas Piketty and Emmanuel Saez in President Barack Obama's budget ("The Obama Rosetta Stone," by Daniel Henninger, Wonder Land, March 12): In their use of statistics of the top 1% of income earners, Messrs. Piketty and Saez make the same false assumptions that the Internal Revenue Service does. In 1980 income disparity began to take off in the U.S. leaving the top 1% of income earners with a greater share of the income pie. Like the IRS, these French economists use "household" income as their measure.
But consider that 1980 was about the time when large percentages of college-educated women began to enter the workforce. Many of these professional women would go on to marry other professionals. This in effect created a doubling of "household" income for many families.
At the same time out-of-wedlock birth rates and divorce began to skyrocket creating large percentages of single-parent households. It should be no surprise that a two income household has a much higher income than a single-income household even if all workers make exactly the same income.
Surgeons will always make more than janitors, as anyone who has ever gone "under the knife" will agree with, and their income should not be distorted because they are married to a fellow surgeon.
Steve Walde; Easton, Conn.
MP: The graphs above illustrate Mr. Walde's point. The increasing share of income going to the top 1% of households since 1986 coincides with the increasing share of college degrees going to women. I never made the connection between those two trends before, but I think he makes a great point.
Professional Women Drive More Families Into Top 1%
In regard to the appearance of French economists Thomas Piketty and Emmanuel Saez in President Barack Obama's budget ("The Obama Rosetta Stone," by Daniel Henninger, Wonder Land, March 12): In their use of statistics of the top 1% of income earners, Messrs. Piketty and Saez make the same false assumptions that the Internal Revenue Service does. In 1980 income disparity began to take off in the U.S. leaving the top 1% of income earners with a greater share of the income pie. Like the IRS, these French economists use "household" income as their measure.
But consider that 1980 was about the time when large percentages of college-educated women began to enter the workforce. Many of these professional women would go on to marry other professionals. This in effect created a doubling of "household" income for many families.
At the same time out-of-wedlock birth rates and divorce began to skyrocket creating large percentages of single-parent households. It should be no surprise that a two income household has a much higher income than a single-income household even if all workers make exactly the same income.
Surgeons will always make more than janitors, as anyone who has ever gone "under the knife" will agree with, and their income should not be distorted because they are married to a fellow surgeon.
Steve Walde; Easton, Conn.
MP: The graphs above illustrate Mr. Walde's point. The increasing share of income going to the top 1% of households since 1986 coincides with the increasing share of college degrees going to women. I never made the connection between those two trends before, but I think he makes a great point.
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