The Growing Income Inequality That Apparently Doesn't Exist

President Obama and liberals across the country are trying to make income inequality THE issue of the 2014 election—and probably the 2016 election, since there is little reason to believe the president’s economic policies will ever jumpstart the economy.
 
And because the president can’t miss an opportunity to explain why income inequality is hurting the middle class, which he claims is the result of failed economic policies of the Bush years, the media regularly regurgitate the president’s assertions, highlighting how it will hurt Republicans if they don’t vote for a higher minimum wage, extending unemployment benefits even further, and some kind of equal-pay law.
 
But what if income inequality has been basically flat for … 20 years?  That’s what Census Bureau figures show.
 
The Census Bureau regularly tracks what economists refer to as the Gini index (or coefficient), which dates back to a 1912 paper by Italian statistician Corrado Gini. It’s a widely used formula for tracking income inequality. The World Bank says the “Gini index measures the extent to which the distribution of income or consumption expenditure among individuals or households within an economy deviates from a perfectly equal distribution.”  The higher the number the greater the income inequality.
 
As the graph shows, income inequality has been nearly flat since 1993—under Presidents Bill Clinton as well as George W. Bush—with only a slight uptick beginning in about 2010. That uptick would be under Obama.


 
There is no doubt that the U.S. has millions of families that are hurting financially. Many workers can’t find a job and have dropped out of the workforce, leading to the lowest labor force participation rate in decades. These families are the victims of Obama’s higher taxes, expanded regulations and Obamacare—and his new proposals would only make the situation worse. To the extent the Gini index has risen in the last few years, blame it on Obama’s policies.
 
Saying income inequality has grown dramatically, as Obama does repeatedly, doesn’t make it true, even though millions are struggling and feel left out. Those who want to make income inequality a campaign issue should explain why the Census Bureau’s data are wrong.