Help the Poor?

http://news.bbc.co.uk/2/hi/business/7681435.stm

 

The article quotes a report saying in the nations surveyed, income of the richest 10% of people was, on average, nearly nine times that of the poorest 10%. In the US, the “rich” makes more than 15 times as much money as the poor. The income gap has widened over the years, so, in conclusion, the poor needs more help. There were no mentions of absolute income, living standard in any real terms. So if Peter is poor and made $10K 10 years ago, now he makes $30K. While Peter’s brother Richard made $100K 10 years ago, new he makes $400K. Richard made 10x what Peter made 10 years ago, now he makes 13.33x what Peter made. The article claims that it is not fair, because they want Peter to be making $40K if his brother is able to increase his earning by 400% to $400K. What kind of logic is that? If Richard makes $300K instead of $400, 6.667x poor/rich income ratio, will that make it fair?

One thing these kinds of reports never tell you is that the bottom 10% does not stay at the bottom for long, and the same goes to the top 10%. In the US at least, people in the bottom earning bracket are usually new immigrants came from poorer counties and being the poorest 10% in America is not much worst than where they came from. These new immigrants, however, move up the income scale quickly. In America, it is likely that poor Peter in our example move up the income scale quicker than his brother Richard and make $50K while his brother makes $200K, or 4 times more than Peter instead of 10 times 10 years ago. At the same time, some new immigrant makes $25K and another second generation immigrant increase his income from $100K to $600K, and the so call “income gap” widened as a result. If statistics track individuals and show majority of poor people stays poor, than we can conclude that the poor needs more help. The fact that average income of top 10% is n times greater than average income of bottom 10% tell us nothing useful.

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