Saturday, May 19, 2012

Income Inequality is Not the Same as Racial Discrimination

It's quite a jump to claim that poor people are discriminated against in the same way Blacks were before the Civil Rights Era. It's in fact, an incredible leap off a cliff, but it's exactly what some people claim. They attribute income inequality to some form of unfair discrimination. The poor are assumed to be discriminated against in the same way Blacks and other minorities were in the past. But just how do you identify a poor person? I'm sure many here have their assumptions, but no, you can't identify a poor person by the clothes they wear or the car they drive. As described in the book, The Millionaire Next Door, many of the rich drive older model cars like Camrys and Accords. I know one multi-millionaire that has never bought a new car in his life and he's in his late 60's now. Likewise, you can find a poor person driving a flashy car. The same applies with clothing. It seems to me that instead of attributing unequal outcomes to discrimination and some sort of unfairness, the most logical explanation is that unequal outcomes arise from unequal skills and attributes. If we examine any skill or base of knowledge, we would see a wide range of proficiencies amongst the general populace. If a fair system rewards those with greater skills and knowledge in areas of demand, then we would EXPECT to see income inequality. Only in an UNFAIR system would we see equality in income.

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