Thursday, June 22, 2006

Income inequality

This article in the Economist assesses the current wealth gap in the United States in detail and looks for explanations. Read it. It contains some striking facts, one of which is that the share of aggregate income going to the top 14,000 taxpayers in this country of 300 million is nearly 3%. That's spectacular. A graph also shows the amount of income controlled by top earners over time, from 1913 to 2004. Top earners controlled the least amount of income in this period around 1970, which is when labor unions reached their height.

This issue concerns me, because as j. morgan has eloquently argued in those long comments that gmack hates to read and refuses to write, it tends to negatively impact civic life. No one objects to certain people working harder than others, or controlling more wealth than others; but when governments start working more for the interests of the rich and powerful it becomes a problem in its own right.

The flip side is that I think that the US compares favorably in many regards with the wealthy Western European countries, Japan, Argentina, Canada and other world powers. Despite the fact that the Economist article mentions that social mobility is more flexible in Europe than most people think, I'd still rather live here than anywhere else. We have such vast wealth, so many natural resources and such hard workers that the share of income divided up by the middle class is still high, and the American dream is still possible (though not guaranteed.)

When I approach issues like this, I DON'T think to myself: how can I redistribute the earnings of those 14,000 taxpayers, so that they make less and BillyJoe down at the BP makes more? I think: how can we have a more just country?

So: is income inequality a problem? If so, what should we do about it? If not, is anything a problem? And will this blog post finally bring down the repressive North Korean regime?

7 Comments:

At 1:44 PM, Blogger RedHurt said...

I have no idea what to do about it, and I don't know if it's a problem. It seems like it would be, but it currently isn't for me or anyone I know or have seen or have contact with. The suffering lower-class people I've dealt with in our social services system certainly aren't being kept down by the man or rich people. The non-sufferers might be doing better if the income was distributed better, but that's hard for me to spectulate on. I guess my opinion is that there are much bigger problems that we could have a greater impact on, and I agree that the American Dream is still mostly-acheivable. I don't know anyone who's down and out and desperately working hard to change those circumstances, but lots of lazy fat people who won't do anything but whine about it.

 
At 3:39 PM, Anonymous dadman said...

Thanks for the link to the Economist article, that was a great article. The numbers are stunning. It's hard to point a finger at exactly how income disparity is a problem. Like redhurt says, it doesn't seem to be what keeps the underclass down, per se.

Still... don't we suspect that more money equals more access to the levers of politics in the country, and that too much money in too few hands is a gravitational pull tugging us away from democracy?

(And isn't that something j morgan said in a different thread?)

The question then would be--is it a bad thing to be less of a democracy? I would say yes.

Some of what we can do has to be in the schools. It could be argued that children should receive an education that helps them be good citizens, not just good workers (there is a lot of focus on the latter lately).

 
At 4:09 PM, Blogger Jackscolon said...

I don't have any statistics to back this up, but I'm pretty sure that higher and higher income brackets become more involved in politics (i.e. voting), at least up until you get to Rap and R&B stars.

http://www.census.gov/population/www/documentation/twps0028/twps0028.html#body

I'm not trying to make the point that unequal access to political levers is just (it isn't, big money has way too much pull), but to what level should politicians be subject to the interests of those who don't participate? and is there any way to reasonably expect politicians not to sell out to those who keep them in power?

as for income inequality- I'm with the redness that I'm not that concerned about it. The numbers are skewed because of the huge increase in illegals driving down wage levels, and "I don't know anyone who's down and out and desperately working hard to change those circumstances, but lots of lazy fat people who won't do anything but whine about it." Plus, I'm not sure how to approach problems that don't have easy, or any, solutions.

 
At 4:35 PM, Anonymous dadman said...

"but to what level should politicians be subject to the interests of those who don't participate?"

A) Hence my point about citizenship being a goal of education.

B) Politicians are sometimes called "public servants"--I don't know about "being subject" to those who don't vote, but I would suggest that leaders of the country should have the well being of every citizen of the country in mind.

 
At 5:04 PM, Blogger CharlesPeirce said...

redhurt: let's take a practical example. You wrote:

I don't know anyone who's down and out and desperately working hard to change those circumstances, but lots of lazy fat people who won't do anything but whine about it.

Take the men at the Bowery. Where are they? Do we have any responsibility to them? Does society? Are they being helped too much? Too little? I'm asking not to needle anyone, but because I honestly don't know. What do you think?

 
At 9:54 PM, Blogger GMack said...

Oh ho. That is so funny to put a link on my name and make it go to Ann Taylor. Shut up.

 
At 6:31 PM, Blogger Jackscolon said...

I hijacked your post (kind of), but your baby making post gets more comments, so I figured you wouldn't mind.

The first two letters of my confirmation word were "VD", which are always funny in the order.

 

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