This is an ingeniously effective video, and will mislead many people. It’s major flaw is to misunderstand stocks and flows. Income is a flow measured over time and wealth is a stock. Income statements vs. balance sheets, annual salary vs. personal net worth, etc.
Two ways (among many) to measure personal financial well-being are one’s income and one’s net worth–assets minus liabilities.
Naturally America’s poor look worse off when considering their wealth compared to that of the top tiers. But if we compared their level of income to that of the rich, they would be far closer together.
Government measures of income always ignor “in-kind” income, such as food stamps (possibly $500/month for some families), free medical care, free or nearly free housing, free child care, subsidized utilities, free phones, etc. Add those in and their income doesn’t look as bad. Furthermore, the earned-income tax credit ADDS to their income at tax time, such that if they earn, say $15,000 per year in a job, the IRS sends them a check for $5,000 per year at tax time. (In truth, I am not sure if this is considered part of their income by the statisticians).
Furthermore, income comparisons conveniently look at pre-tax, not after-tax income. The rich in the high tax brackets obviously don’t get to spend all that high income. In addition, they save a good share of that after-tax income, which feeds investment, new plant and equipment, hiring, etc.
A final consideration should take into account consumption per hour worked. Higher income people work more hours than poor people. Yes, I know, the poor often can’t work, or want to but can’t get hired for many reasons. But the fact remains that in going from the poor tier to the middle tiers to the highest tiers, hours worked increases.
The video in two places confused income with wealth, a fatal flaw if they are expecting credibility. A better measure of well-being is the consumption level of the different tiers while taking work hours into effect.
That would be a more accurate measure of “fairness” than personal net worth.
