In this morning’s New York Times, David Leonhardt writes about two widely used measures of middle class squeeze: income inequality and income volatility. He points out that inequality has increased shaprly over the past 20 years, but that a new report from the GAO suggests that volatility may not have increased. He uses this certainty/uncertainty dichotomy to suggest that policies should be aimed toward the thing we’re sure has increased (inequality) rather than the thing we’re less sure has changed (volatility). According to the GAO, one in five people experiences a drop of 25% or more of their income each year, a proportion that was about the same in 1980, and, by implication, not an issue worth worrying about.
This is a companion discussion topic for the original entry at https://talkingpointsmemo.com/?p=1250536