Simple Arithmetic
29 September 2007
Editor, The New York Review of Books
To the Editor:
In Andrew Hacker's generally smart review of books on income distribution (October 11), he commits a frustrating error when writing that "recent years have seen a larger share of the nation's income accruing to the top 1 percent. And more affluence for them means less for others; the bottom fifth's share has been declining for a generation."
A greater SHARE of total income for one group does not at all mean less affluence for members of other groups whose shares are falling. If the size of the pie is growing, those with shrinking shares of it might still enjoy greater affluence. Six percent of 100, for example, is larger than seven percent of 80.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Editor, The New York Review of Books
To the Editor:
In Andrew Hacker's generally smart review of books on income distribution (October 11), he commits a frustrating error when writing that "recent years have seen a larger share of the nation's income accruing to the top 1 percent. And more affluence for them means less for others; the bottom fifth's share has been declining for a generation."
A greater SHARE of total income for one group does not at all mean less affluence for members of other groups whose shares are falling. If the size of the pie is growing, those with shrinking shares of it might still enjoy greater affluence. Six percent of 100, for example, is larger than seven percent of 80.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Posted by Don Boudreaux on
Wednesday March 26, 2008 at 8:16pm