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All of the world.
Some -- -- wrong numbers when we're trying to measure inequality while our next guest seems to think so she co authored a Wall Street Journal op Ed from -- recent study.
Joining us is a partner at my -- a former consultant to the world bank and now a resident scholar at the American Enterprise Institute.
Thank you for joining us OK so what should we be -- -- -- Remember a lot of focus on -- net income menu when you talk about in the quantity and what we want to point out -- that income may not be adequately measure it and so if it's not the best measure of Clinton quality.
Beef and experience in a fluctuations an -- and incomes because they have a negative income shocks me -- it might decide to.
You know go to school -- other than Barack.
And and as a result of that if you find that you're not -- contribute quality -- -- but if you look at consumption.
You know consumption people tend to smooth consumption over the life Stanford as a Canadian -- -- say that -- pretend to consume out of lifetime income race and -- and then they have.
High income that then to save -- -- it's -- they have -- incomes the -- to death saved.
But it being on average the tries to maintain a standard of living that yeah that's the average for the -- bed for -- lifestyle for the over the lifetime right and I everything -- looking at consumption.
Would be about to -- I understand that because I mean there's an arguments he made that now days more people had TV's more people have washing machines but at the same time we've seen.
Barely any rise in median household income over the last ten years.
The people that are wrapped poverty level are basically still the same as well -- the cost of things have gone up -- mean there's inflation.
It cost way -- -- my box of Cheerios today than it did when I was a kid.
Yes that afternoon giving people -- arriving in the default things.
So what if you look at what happened to consumption and equality it you know over the period 1984 to 2010 this hot -- been a change.
Defying inequality is the ratio of -- in expenditure as consumption expenditure than the -- expenditures on the bottom.
You know that's pretty much stayed constant at about four point feel of the anti -- -- have been -- fluctuations.
And if you look look at the at the kind of things that people are able to -- -- -- the -- income you know 90% of households and I studied.
Had access to different today says access -- microwave and see that you have you have -- -- dishwasher as.
You 50% of households have compute doesn't princess -- -- it did something to be said for our.
And absolute change -- of living that -- -- and you can complain about.
-- -- -- -- -- -- -- -- Sense business except this is being made cheaper as well to -- to the costs are coming down excellent upside -- validate her flat screen TV.
If my if I have to.
Spend more to -- the basic necessities and my truly better off the Mena you know a low income house so that only brings in 40000 dollars.
Spend so much higher percentage of their income on food and gas and the electric bill than say someone who makes 200000 dollars.
F passage issue -- you -- spending more.
If you income and you know but and but to relax then it's likely that they also not managing your income accurate case and there are a lot of time for programs.
That have been helping low income people not flow for the posterity deflecting yet -- -- -- -- food -- program -- -- the Social Security.
And I feel like a lot of the inequality in -- as I've sort of leaving I'll be strong for programs and in looking at income.
Similar you know more accurate measure may be what what people -- off as disposable income just Thomas do you think you can spend.
To be like them that you get rat and that kind of -- know I mean there's a reason why you go up to the course sections of Manhattan are all wearing 200 dollar three -- sneakers and in the place value on very different things apart and that there with the American Enterprise Institute thanks your being with us.
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