No doubt our President will go all out and demand more class warfare. He will be doing so without any regard for the facts. Word is he will announce that all future federal contracts pay workers a minimum wage of $10.10 per hour. (Duh. Just how many federal employees, even those under contract, are making less than that?) The topic is a wedge issue to attempt to divide America even further in advance of next November’s midterm elections. After all, a recent Gallup poll shows only 4% of those surveyed call the “Gap between rich and poor” as the most important issue of the day. The same poll shows that Americans are worried about the economy in general, including unemployment and federal spending.
Income inequality, for the purpose of Obama’s argument, is the difference in household incomes as reported to the Internal Revenue Service. Single living alone? You are a household. Single with a roommate? You are two households for the statistics. Single parent rooming with another single parent? Still two reporting households, even though you are wisely creating economic efficiency by sharing a home. And here’s the big one: married with two incomes? You are those awful rich people. You see, two individuals filing jointly with two incomes report as one household.
Efficiencies in joining households are considered in the poverty guidelines. (These numbers are from 2013 charts, but are sufficient for the argument.) A household of one is considered to be in poverty with an income less than $11,490 a year. A household of two is at $15,510. The government assumes an efficiency of $7,470. ($11,490 x 2 and then less $15,510) for sharing a household.
Sharing the cost of living between two wage earners matters. And if those two are married? It matters even more when contributing to the chances of upward mobility for the children in the household.
Former George W. Bush press secretary Ari Fleischer wrote about income inequality for the Wall Street Journal recently. Too conservative for you? The New York Times penned the article Two Classes, Divided by “I Do” in July of 2012.
…the number of children raised in female-headed families is growing throughout America. A 2012 study by the Heritage Foundation found that 28.6% of children born to a white mother were out of wedlock. For Hispanics, the figure was 52.5% and for African-Americans 72.3%. In 1964, when the war on poverty began, almost everyone was born in a family with two married parents: only 7% were not.
From the New York Times:
Estimates vary widely, but scholars have said that changes in marriage patterns — as opposed to changes in individual earnings — may account for as much as 40 percent of the growth in certain measures of inequality.
Most recently a January 2014 study out of Harvard on economic mobility concludes:
Across all the specifications, the strongest and most robust predictor [of upward economic mobility] is the fraction of children with single parents.
The five factors included in the study: (1) residential segregation, (2) income inequality, (3) school quality, (4) social capital, and (5) family structure.
Consider for a moment that economic mobility has not changed in 50 years. (Then recognize that article is discussing the same Harvard study linked above, but never once articulates the study’s findings with regard to single parents and mobility.)
Single parent families are less efficient in their living arrangements, so they are costing themselves more than dual parent families.
The wiki on income inequality lists numerous reasons why inequality exists. From CEO pay to the decline of unions, it’s in there. All except the rise in single-parent households since 1980. From 1980 to 2007 single-parent households increased from about 6 million to 10 million. That this increase correlates to what is called an increase in income inequality over the same time is no surprise. The correlation, however, is usually ignored. It must be more fun to blame union busting.
Tonight when the President tries to further divide this nation, remember he’s only giving you part of the story. He would be much better preaching to teens that babies come after marriage than that they should be earning $10 an hour salting fries.