What Can You Believe?
To begin, how do you know whether or not to believe us, the authors of this book? Could we be lying to you? How do you determine what information is truthful? Let’s start with a simple one-sentence statement:
Claim 1. Economic inequality has sharply risen in the United States since the 1970s.
Do you believe this claim—or not? Perhaps you’ve never thought about the topic in this particular way before now (and if so, it’s time to wake up). It’s possible your response depends on whether this statement blends in with your prior beliefs, or pushes against them. Or perhaps you’ve been taught to be skeptical of claims lacking supporting evidence (and if so, thank your teachers).
So let’s move on to a more complex two-sentence statement that also cites a source:
Claim 2. In 1970, the top 10 percent of US adults received an average income of about $135,000 in today’s dollars, compared to the bottom 50 percent who earned around $16,500. This inequality gap grew sharply over the next five decades, as the top tier income climbed to about $350,000, while the bottom half barely moved to about $19,000, according to the World Inequality Database.5
Is this second claim more believable than the first one? It now makes a more precise claim by defining economic inequality in terms of average income for the upper 10 percent versus the bottom 50 percent over time. Also, this sentence pins its claims to a specific source, and invites us to read further by following the footnote. But how do these factors influence its persuasiveness? Does the sentence lead you to ask about the trustworthiness of the source and how it defines “income”? Does the wording make you wonder about the other 40 percent of the population between the two extremes?
To answer some of those questions, let’s supplement the second claim with a bit more information, as shown in Table 0.1.
|US Income Tier||1970||2019|
|Top 10 Percent||$136,308||$352,815|
|Middle 40 Percent||$44,353||$76,462|
|Bottom 50 Percent||$16,515||$19,177|
Note: Shown in constant 2019 US dollars. National income for individuals aged 20 and over, prior to taxes and transfers, but includes pension contributions and distributions. Source: World Inequality Database, accessed 2020
Does Table 0.1 make Claim 2 more persuasive? Since the table contains essentially the same information as the two sentences about top and bottom income levels, it shouldn’t make any difference. But the table communicates the evidence more effectively, and makes a more compelling case. For many people, it’s easier to read and grasp the relationship between numbers when they’re organized in a grid, rather than complex sentences. As your eyes skim down the columns, you automatically notice the huge jump in income for the top 10 percent, which nearly tripled over time, while the bottom 50 percent barely budged. In addition, the table fills in more information that was missing from the text about the middle 40 percent, whose income grew over time, but not nearly as much as the top tier. Furthermore, the note at the bottom of the table adds a bit more context about how the data is “shown in constant 2019 US dollars,” which means that the 1970s numbers were adjusted to account for changes to the cost of living and purchasing power of dollars over a half-century. The note also briefly mentions other terms used by the World Inequality Database to calculate income (such as taxes, transfers, and pensions), though you would need to consult the source for clearer definitions. Social scientists use different methods to measure income inequality, but generally report findings similar to those shown here.6
World Inequality Database, “Income Inequality, USA, 1913-2019,” 2020, https://wid.world/share/#0/countrytimeseries/aptinc_p50p90_z;aptinc_p90p100_z;aptinc_p0p50_z/US/2015/kk/k/x/yearly/a/false/0/400000/curve/false.↩︎
The World Inequality Database builds on the work of economists Thomas Piketty, Emmanuel Saez, and their colleagues, who have constructed US historical income data based not only on self-reported surveys, but also large samples of tax returns submitted to the Internal Revenue Service. See WID methods at World Inequality Database, “Methodology” (WID - World Inequality Database, 2020), https://wid.world/methodology/. See overview of methodological approaches in Chad Stone et al., “A Guide to Statistics on Historical Trends in Income Inequality” (Center on Budget and Policy Priorities, January 13, 2020), https://www.cbpp.org/research/poverty-and-inequality/a-guide-to-statistics-on-historical-trends-in-income-inequality. See comparable findings on US income inequality by the Pew Charitable Trust in Julia Menasce Horowitz, Ruth Igielnik, and Rakesh Kochhar, “Trends in U.S. Income and Wealth Inequality” (Pew Research Center’s Social & Demographic Trends Project, January 9, 2020), https://www.pewsocialtrends.org/2020/01/09/trends-in-income-and-wealth-inequality/.↩︎