Money: Who Has How Much and Why?

• Author: Sawhill, Isabel V.

Over the last two decades the distribution of economic rewards in the United States has grown steadily more unequal. Although living standards have improved -- at least a little -- for just about everyone, the incomes of those at the top of the scale have increased much faster than those at the bottom. Between 1975 and 1995, the income of the top one-fifth grew by 35 percent while the bottom fifth's inched up by a mere one or two percent. The average household now has an income of $45,000 a year, but the spread between the richest one-fifth (with an average income of $109,000) and the poorest one-fifth (with only $8,000 a year) is wider than it has been in the past and wider than it is in other industrialized democracies. These growing disparities are partly driven by demographic changes, including more single-parent families at the bottom of the distribution and more two-paycheck families at the top. But they also result from a job market which rewards the talented and fortunate exceedingly well while leaving the less talented and fortunate with meager incomes. It's a high stakes game in which education is, more than ever, the key to success.

These are just a few of the facts to be gleaned from Andrew Hacker's new book, Money: Who Has How Much and Why? In the book, you discover just about everything you ever wanted to know about this topic, at a level of detail that would delight any town gossip. For example, we learn that orthopedic surgeons have an average income of $304,000 a year whereas pediatricians earn only $113,000 a year; that in 1995, the paychecks of corporate chairmen averaged 190 times that of a typical worker, up from a ratio of 40 times the wages of a typical worker 20 years ago; that in the country's hundred largest law firms, partners typically make $446,000; that 137 Americans have personal fortunes exceeding $1 billion; and that Imelda Marcos has 3,000 pairs of shoes. It is often said that Americans would rather talk about sex than money. Hacker makes the topic of money not only sexy but, wherever possible, titillating. The prose bounces playfully off the pages, albeit in a tone that leaves little doubt in the reader's mind about the author's own ideology.

Despite his explicit request that the book not be read as a plea for more income redistribution...