CHRIS LEE BLOG 5 New ideas about Income Growth

In this article, Brukhauser, a professor of public policy at Cornell analyses the preconceived notion of income inequality and hopes to look at to shed more light on how not only its measure but how to deal with it as well. By definition, income is “a post-tax, post-transfer, size-adjusted household income including the ex-ante value of in-kind health insurance benefits,” which revealed how inequality was either increasing or decreasing between the upper, middle and poor classes. As we discussed in class and other readings on intersectionality, there are more than one facet play into how inequality in wealth is adjusted and measured. In some cases, the general household income doesn’t do adequate justice in fulfilling basic and social needs. As Burkhauser hopes to suggest, the debate over income  should be redefined as “the yearly accrued capital gains to measure yearly changes in wealth.” This way it attempts to measure the increase in taxpayer assets year by year and see that as income. Assets like ownership of property, thus making spikes in sales occur when its sold, but over the yearly gains. Those who own houses would see changes in their income if applied, as their home, being one large asset, would apply to their income analysis. So even if their income goes up, their living conditions stay the same. This is a whole idea of identifying inequality and wealth, but its necessary and sometimes refreshing to look beyond what is normally measured and see from an outside perspective other areas in which inequality and/or wealth can be analyzed. I do agree that there should be more measures in which income, wealth, and even how taxes are measured to families or individuals, but Burkhauser suggestion requires much more assumptions than would be beneficial in application. Also, his analysis as suggested down below reveals that income growth is far less extreme between the differences of wealth.

However, in the current state of how income is adjusted and analyzed, it could prove to be important to see it another way. As intersectionality would try to apply, there are more than just class and wealth involved. Resources, children resources, the market, competition, etc. are all things that are factors that have little data in comparison to inequality in wealth and income. Quality of life in living can be measured in so many ways, its refreshing to see how burkhauser is trying to see it more than what is said to be known. Its these steps of theory and analysis that I think will help us understand inequality and wealth a little more.


Here is what is normally understood as income growth:Image


And here is what Burkhauser suggests with his definition of income:



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