Thursday, July 23
Posted 2 p.m. EDT
Ever wonder how the rich get richer? At the risk of seeming obvious, it's because they work more. That's according to this book, by economists Mark Aguiar and Erik Hurst, published by the American Enterprise Institute for Public Policy Research.
The authors dissected a four-decade survey that took place from 1965 to 2005, and examined leisure -- specifically, "leisure inequality" in America.
Many people (you know who you are) who are double-fisting the BlackBerry and cell phone, will ask, "What leisure?" In fact, the study notes that the leisure time of the average American has increased by approximately four hours per week since the 1960s. After rising by about five and a half hours a week from 1965 to 1985, it then fell by an hour and a half a week during the past 20 years.
But the more interesting statistic is the leisure gap between the less educated and the well-educated. In short, those without a high school diploma increased their leisure time by about eight hours during the period of the survey, whereas the college-educated Americans decreased their time at rest and play by six hours.
Of course, unemployment is higher among those without a college degree. But as this blog in U.S. News & World Report points out, the authors also make an argument against President Barack Obama's plan to redistribute wealth by taxing those with the highest incomes: "Aguiar and Hurst argue that their research may show that lower-earning Americans work less -- and therefore earn less -- because they choose to, not because the system is gamed against them."
President Obama has his own plans for how he wants to spend the revenue he collects from the highest-income earners. But when the rich are motivated to get richer by working more, it sets in motion its own wealth-distribution scheme. The more they spend on goods and services, the better it is for the economy.
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