Far from having the 21st-century equivalent of an Edwardian class system, the United States is characterized by a great deal of variation in income: More than half of all adult Americans will be at or near the poverty line at some point over the course of their lives; 73 percent will also find themselves in the top 20 percent, and 39 percent will make it into the top 5 percent for at least one year. Perhaps most remarkable, 12 percent of Americans will be in the top 1 percent for at least one year of their working lives.
The top 1 percent, as I have noted here before, is such an unstable group that it makes no sense to write, as so many progressives do, about what has happened to its income over the past ten year or twenty years, because it does not contain the same group of people from year to year. Citing tax scholar Robert Carroll’s examination of IRS records, Professor [Mark R.] Rank [of Washington University] notes that the turnover among the super-rich (the top 400 taxpayers in any given year) is 98 percent over a decade — that is, just 2 percent of that elusive group remain there for ten years in a row. Among those earning more than $1 million a year, most earned that much for only one year of the nine-year period studied, and only 6 percent earned that much for the entire period.
“Ultimately,” Professor Rank writes, “this information casts serious doubt on the notion of a rigid class structure in the United States based upon income. It suggests that the United States is indeed a land of opportunity, that the American dream is still possible — but that it is also a land of widespread poverty.” Data from the Bureau of Labor Statistics finds that among the allegedly privileged 1 percent, inherited wealth accounts for only 15 percent of household holdings, a smaller share than it does among middle-class families.
As Rank hints, what is hereditary in the United States is not wealth but poverty. The Left’s focus on the status of wealthy and high-income Americans is precisely backward — backward if improving the lives and opportunities of those born into poverty is your goal. If your goal is to increase the income and power of the public sector for your own economic and political ends, then of course it makes more sense to focus on the rich: That’s where the money is, and the perverse reality of the Left is that it cannot fortify its own interests by improving the lives of the poor but can do so by pillaging the rich. Indeed, a generation of transformative economic dynamism for the worst-off Americans would be a political and cultural catastrophe for the Left, whose power has its foundation in those who are to some extent dependent upon government largesse and — much more important — those who make their careers managing that dependency. A lesson that conservatives keep not quite managing to learn is that our long-term problem is not so much those who are receiving checks from the government as it is those who are signing them. Economically rational people who are dependent upon government support can be weaned from it through the relatively simple expedient of a better deal; economically rational people who are in the employ of the welfare bureaucracies at above-market wages are not expecting a better deal, nor should they be.