Economic Success Better for The Rich : Middle & Poor Classes Better Off Also

According to this report, some figures that appear in the main stream media are not representative concerning the divisions between the rich and the poor and how their chances for success are not truthful represented.

It appears the rich have more opportunity, freedom, to take chances to increased wealth, while the poor and middle classes also have opportunity to have economic mobility. But the media, that is dominated by progressive socialists, sees this as their opportunity to drive a wedge between the classes for advancing their political agenda for economic and class warfare.

This divide between those that seem to have more and those that seem to have less is some how by design. The narrative of the instigators is the rich do what ever they can to keep the poor from moving into the middle and upper classes in our society just to protect themselves from competition. The agitators say the rich fear the other classes and so want to hold them down. 

What nonsense, but the spin the socialists use to foster the economic and class war between those that have against those that don't have but want more is just a political strategy to gain votes at the expense of those that can least afford to side with socialist democrats, instigators.

It's clear, the progressive socialist democrats are using and abusing the poor and the middle classes for political advantage. What isn't so clear is why many among these classes still believe and vote for the very people that are abusing them and holding them down?

Why the "Rich" Can Get Richer Faster than the "Poor"
Source: Richard B. McKenzie and Kathryn M. Shelton, "Why the 'Rich' Can Get Richer Faster than the 'Poor'," National Center for Policy Analysis, July 2014.

July 10, 2014

There are important reasons for the income gap between the "rich" and the "poor" that have gone largely unrecognized, explain Richard McKenzie and Kathryn Shelton in a new report for the National Center for Policy Analysis.

While a number of social and economic factors explain the growth in income disparity -- from family breakdown to government welfare program incentives -- McKenzie and Shelton identify two additional reasons why the relative growth in the income of the rich is "practically inevitable," by official measures:

• The way that the income distribution is split into "fifths" of households gives the misleading impression that individuals at the bottom of the income ladder are making fewer gains than they actually are.
• The rich have more opportunities to diversity their investment portfolios and soften the consequences of risk-taking.

The division of households into "fifths" or "quintiles" gives the appearance of greater inequality than actually exists. While one might assume that there are equal numbers of individuals in each quintile, there are actually far more people -- and workers -- in the upper income brackets.

• There are 82 percent more people in the top fifth of households than in the bottom fifth.
• In 2006, 81 percent of households in the top fifth had two or more workers, but only 13 percent of households in the bottom fifth had two or more workers.
• In almost 40 percent of households in the bottom fifth, no one was working.

Significantly, assessing income inequality by comparing fifths of households does not take into account the fact that people in different income divisions do not remain in those divisions throughout their lives. When low-income individuals move into higher income brackets, their newfound wealth is reflected in the upper income brackets that they reach, not in the lower income brackets that they leave behind. And income mobility remains a reality in the United States today:

• Of all adults in America, 67 percent had higher incomes than their parents, according to the Federal Reserve Bank of San Francisco.
• Forty percent of people in the lowest fifth of income earners in 1986 had moved to a higher income bracket by 1996. Almost half of the people in the lowest income quintile in 1996 had moved to a higher bracket by 2005.
• According to one study that tracked 25- to 60-year-olds over a 44-year period, a majority of Americans spent at least one year in the top 10 percent, and three-fourths spent at least one year in the top quintile.

McKenzie and Shelton also describe how the wealthy are able to maintain highly diversified investment portfolios. Their wealth allows them to take on risky investments that carry high rates of return without the hazards associated with the far less diverse portfolios of lower income individuals.