A lot of liberals seem to have gotten in the habit of presuming that, morally speaking, other things are never equal because rich people being absolutely better off causes poorer people to be absolutely worse off. But that presumption isn’t just unfounded, it’s empirically false.
Consider Lane Kenworthy’s findings in this connection (my emphasis):
That, Kenworthy hastens to add, isn’t an argument against redistributive social policy. On the contrary, if income is a reliable measure of well-being, increases in the absolute well-being of people on the lower rungs of the socio-economic ladder in western societies over the last thirty years has largely been a function of the effectiveness of redistributive social policy:“Income inequality has risen sharply in the United States and some other affluent countries since late 1970s, with much of the increase consisting of growing separation between the top 1% and the rest of the population. . . .
“Has this been bad for the incomes of the poor?
“In a relative sense, the answer is yes, at least in the United States. According to the best available U.S. data, from the Congressional Budget Office, the share of income going to households at the bottom has decreased.
“What about in an absolute sense? Would the incomes of low-end households have grown more rapidly in the absence of the top-heavy rise in inequality? If we look across the rich nations, it turns out that there is no relationship between changes in income inequality and changes in the absolute incomes of low-end households.”
So there is ample reason to conclude that, at least over the last thirty years, liberalism has measured up to its own moral standards. The question is whether it’s fiscally sustainable in the longer term in anything resembling its current form. No responsive answer, however, will have much to do with relative income inequality.“[I]ncome growth for poor households [across developed societies] has come almost entirely via increases in net government transfers, and the degree to which governments have increased transfers seems to have been unaffected by changes in income inequality. . . .
“In some countries with little or no rise in income inequality, such as Sweden, government transfers increased and so did the incomes of poor households. In others, such as Germany, transfers and the incomes of low-end households did not increase.
“Among nations with sharp increases in top-heavy inequality, we observe a similar disjunction. Here the U.S. and the U.K. offer an especially revealing contrast. The top 1%’s income share soared in both countries, and through the mid-1990s poor households made little progress . . . But over the next decade low-end American households advanced only slightly, whereas their British counterparts experienced sizable gains. The New Labour governments under Tony Blair and Gordon Brown increased benefits and/or reduced taxes for low earners, single parents, and pensioners.”