Earlier this month, my colleague Ryan Greenfield wrote a column decrying the supposedly increasing income inequality in Wisconsin and offered a number of policy suggestions to fix the “problem.” I, for one, pray our policymakers at the Capitol skipped reading that article. Not only did Mr. Greenfield grossly exaggerate the income inequality gap, but the suggestions he offered were also uninformed and detrimental to our economy.

The foundation of his column was built on a study put forth by the Center on Wisconsin Strategy and the Wisconsin Council on Children and Families, which claimed the income gap between the rich and the poor rose dramatically between the late 1980s and the mid-2000s in Wisconsin. Unfortunately for Mr. Greenfield, he constructed his assertions on a shaky foundation.

The study argues that since the bottom 20 percent of the population only experienced a 7 percent growth in real wages, and the real wages of the upper 20 percent grew by 36 percent during this period, the rich must be getting richer at a much faster rate than the poor. There’s one glaring problem with this reasoning — the bottom 20 percent of the population in the late ’80s is a much different group of people than those who make up the bottom 20 percent in the mid-2000s.

A brief example will illustrate this point. Suppose you’re in a family in the bottom 20 percent of the population in 1990. You and your family work hard, you get a raise, you get a new job, save your earnings and, by 2005, there’s a very good chance you’re much better off than you were 15 years earlier. You’re probably not in the bottom 20 percent anymore.

However, the gains made by you and your family will not be reflected in that bottom 20 percent. A family that moves into the middle quintiles by 2005 will be counted as part of that group, rather than part of the bottom 20 percent as it was in 1990. The bottom 20 percent is composed of different people than it was two decades ago. This renders an analysis of the “growth” of the different percentiles useless, since any growth by the people in the bottom percentile will not be reflected in the data.

A skeptical response to this line of reasoning might go something like this: “If people in the bottom 20 percent move up into the higher quintiles, just who is making up that bottom 20 percent. Someone has to be there, right?” True, there’s always going to be a bottom 20 percentile — however, it’s not always going to be the same people in it.

From 1990 to 2006, a rise in immigration directly contributed to the 13.6 percent growth in Wisconsin’s population. Because immigrants tend to be worse off economically than the average population, they consequently make up a significant portion of the bottom 20 percent of Wisconsin in the mid-2000s. Therefore, the 7 percent growth reported by Center for Wisconsin strategy underestimates the income growth of the people in the bottom 20 percent in the late 1980s.

So, then, is immigration the problem? On the surface, it appears immigration is suppressing the growth of the bottom class of society. However, for this statement to be accurate, the relative prosperity of immigrants in the United States has to be compared to the economic situation they left in their home country. I’m confident most recent immigrants have experienced a far greater income growth than the mere 7 percent reported by the study. This data is essential to offering a fair assessment of the economic growth of the bottom 20 percent.

Studies like the one Mr. Greenfield cited in his column are fatally flawed. They offer little other than excuses for economic hysteria, which politicians so skillfully exploit to get elected.

I admit that I’m an optimist when it comes to the economy, which is why I get so frustrated with studies like this one. Whether its goal is to intentionally misrepresent the economic health of our state or the authors simply lack the ability to effectively reason matters little to me. It’s my hope that our elected officials implement policy that encourages economic growth and development, rather than heeding the calls to implement counterproductive policies advocated by the Center on Wisconsin Strategy and Mr. Greenfield.

However, politicians who are optimistic on the economy rarely get elected; let’s just say I’m not getting my hopes up.

Corey Sheahan ([email protected]) is a senior majoring in economics and history.