People often say that “the rich are getting richer while the poor are getting poorer.” Economics professor Steve Horwitz explains why in the United States, this characterization is largely a myth. Real income levels of the poorest 20 percent of Americans have actually risen over time. Further, the individual households that comprise the bottom income bracket do not stay the same. The majority of Americans in the poorest 20 percent become wealthier over the course of their lives.
There remains contradictory views especially by economists on the case scenario in the developing world. Some argue that the case as discussed is very much relevant even to developing economies like India, wherein it is the lower middle and the middle class ascendancy in incomes that is contributing to growing market sizes.
It would be great to get your thoughts on the situation in the developing world.
Thanks very much and Happy New Year 2012.