Understanding the Myth of American Inequality

Phil Gramm and John F. Early claim America is in fact equal with its peers.

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In a new commentary for The Wall Street Journal, Phil Gramm and John F. Early write that critics often attempt to say that even in America, income is distributed less equally than in other developed countries.

Gramm — a former chairman of the Senate Banking Committee — and Early, who served twice as assistant commissioner at the Bureau of Labor Statistics, write that critics use data from the Organization for Economic Cooperation and Development, which ranks the U.S. as the least equal of the seven largest developed countries.

However, they argue, the OECD income-distribution comparison is biased. The U.S. under-reports its income transforms in comparison to other nations, which is not accounted for in the data. When the data is adjusted to account for this, the U.S. is shown to have an income distribution that aligns closely with its peers, Gramm and Early claim.

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