Finally we can put the whole income inequality issue to rest. According to today’s Washington Post, a study by Thomas Hungerford of the non-partisan Congressional Research Service (though the study is not a CRS product) found that the rise of income inequality in this country over the past 15 years has to do simply with “runaway income from capital gains and dividends”. Whew! What a relief!!
So if you’ve been losing sleep over this one—that is, if you’ve been blind to the advancement in living standards at all income levels over the past 15 years (in spite of the growing wage gap)—you can move on to another worry. The culprit, according to Hungerford, is something utterly wonderful for lower-incomers; investment. And when we’re talking businesses, we’re talking capital investment. Capital investment spawns innovation, invention (affordable life accoutrements for consumers and greater efficiencies for businesses and consumers), and economic growth (job opportunities at every rung of the economic ladder).