Saturday, May 18, 2013
"... the nation's wealthiest 1 percent control 34.6 percent of the country's net worth, a larger discrepancy than at any point in the United States, including 1928."
ABOUT TRUTH TEST
TRUTH TEST is a regular feature of MaineToday Media's campaign coverage in which we cast a critical eye on the truthfulness of advertising and public comments by political candidates.
-- State Sen. Cynthia Dill's "issues" page
Cynthia Dill, the Cape Elizabeth Democrat running for U.S. Senate, talks a lot about the income gap between the 1 percent and 99 percent. We've already evaluated one claim of hers in which the gist of her statement was correct, but the numbers she used to get there were bad. This one's less successful.
Here, she uses a true but dated figure for net worth. But she's flat-out wrong that the net worth gap is the worst since the Great Depression. It's been worse as recently as the Clinton administration.
Dill's figure for the 1 percent's share of net worth, or wealth, appears to come from a figure for 2007 from Edward N. Wolff, a New York University economist.
A more recent figure for 2009 wealth from the liberal, nonpartisan Economic Policy Institute using Wolff numbers, puts the 1 percent's share of wealth at 35.6 percent. So we compared that figure to data compiled by Wolff in multiple past studies, kept on the University of California Santa Cruz's website.
Wolff, looking only at 23 individual years between 1922 and 2007, has found that the top 1 percent's share of wealth exceeded 35.6 percent at least six times since 1928 -- in 1929, 1939, 1989, 1992, 1995 and 1998.
That's important because the gap between the two categories is large. Income and net worth are two starkly different measures of money.
For example, the Economic Policy Institute, again using Wolff numbers, put the top 1 percent's share of 2009 household income at 21.3 percent, far lower than 35.6 percent of wealth.
Verdict: Dill was on the right track but mixed two different categories on the way to a bad conclusion. If income inequality is bad, wealth inequality is worse, but that's no new problem. Dill should shore up her numbers on the subject as November inches closer.
We rate this statement mostly false.
Staff Writer Michael Shepherd can be contacted at 621-5632 or at: