NCPA - National Center for Policy Analysis

Myths of Income Inequality

February 6, 2004

Census Bureau data reveal why some families earn more than others, says Alan Reynolds (Cato Institute).

On reason is that families with two earners have incomes at least three times larger than families in which nobody works:

  • Median family income in 2001 was $51,407, but that figure combines median income of $21,958 among families with no workers and $66,151 among families with two earners.
  • Among married couples where both work full-time, median income was even higher -- $76,150.
  • Average family income was $16,014 among families in which the household head was younger than 24, but $45,978 when the household head was aged 45 to 54 years.
  • For family heads with a bachelor's degree, median income was $78,518; for those with less than a ninth-grade education, median income was $25,077.

Politicians can't really do much about inequality, explains Reynolds unless they take money from two-earner to give to no-earner families, from college graduates for dropouts from free public high schools, and from parents trying to put the kids through college to transfer to those in their early 20s.

Source: Alan Reynolds (Cato Institute), "Musty old lies about income inequality," Investor's Business Daily, February 6, 2004 and TOWNHALL.COM, February 5, 2004.


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