Reverse Robin Hood

 

 Adventures of Robin Hood Theme

He called the greatest archers
To a tavern on the green,
They vowed to help the people of the king,
They handled all the trouble
On the English country scene,
And still found plenty of time to sing.

There has been a reverse Robin Hood at work in the US.

Using official US Census reports on income, the average household has a demonstrably smaller share of income, and the upper income households are receiving an increasing larger share of income. The effects may have been hidden by inflation, but these effects are evident.

Income by group is reported in current dollars and in 2019 dollars where the effects of inflation are considered ( e.g. 1979 dollars are restated as 2019 dollars).  If inflation is not considered, it appears that all income groups have increasing incomes.

However if inflation is considered the distribution of incomes is markedly different.

Mean incomes in 2019 USD in the lowest (0%-20%) through fourth (60%-80%) fifth have remained virtually constant, while the mean incomes in the top 5% have increased, particularly from 1981, the beginning of the Reagan, supply-side, tax cuts.

The distribution of income appears to be skewed to higher incomes, where that distribution should not include incomes less than zero. The Census reports the mean and median incomes. The ratio of the mean to the median has been steadily increasing over the reporting period. If the mean is not equal to the median, a third statistic, the mode or most common value, has been estimated by an empirical formula that can be used if the distribution is skewed moderately or less. If the mean, mode, and median are all equal, a distribution is said to be normal. If the distribution has a positive skew, i.e. towards higher incomes, the mean will be greater than the median which will be greater than the mode.

Without considering inflation, the estimated mode was continuously increasing until 1990, at which point it began an erratic decrease. However when inflation is considered, and a moving 5 year average is used to dampen year to year fluctuations, the mode of income has been  continually decreasing during the entire period.

The skewing of income toward higher incomes and the stagnation or decline of the most common, mode, income, has been masked by inflation, but when inflation is considered, the decline is evident.  Where is Robin Hood when you need him?