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Income Inequality Equals Pathogenic Social Policy

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Your life, mine and all others consist of three separate but interrelated phases; your personal life, your interpersonal life and your work life.   Your personal life is, of course, integral to both of the other two.   For almost everyone, work life necessarily includes interpersonal relations but can easily be viewed separately.   Your interpersonal life may be referred to as your social life and your work life as your economic life.

Each of these three life phases, personal, interpersonal or social and work or economic, have been, indeed continue to be, influenced by family, society and culture.   To a large extent, you are a victim of each; you were born into each.   Yet, to one extent or another you will influence each. In either case a question arises.   What societal or cultural environment might provide a preferential life?   What in fact might be preferential?

From a personal standpoint, it is reasonable to conclude you would prefer sound physical and mental health over a long lifetime.   Too, you would likely prefer to live in a nonviolent-safe environment where educational and employment opportunities were pervasive and where social mobility was constrained by neither.   In short, you would prefer to live in the land of the "American Dream" as have more than 40 million now living legal immigrants to this country, a figure growing by more than 1.5 million annually.   Moreover, the USA with its "American Dream" is by far the preferred country of destination for those desiring to immigrate throughout the world whether legally or illegally.

The question is, are you living there now, are you living in the land of the "American Dream"?   The answer is that you are not.   

Dr. Jeffrey B. Ritterman in the April issue of The American Journal of Medicine asks, " Imagine a microbe that lowers life expectancy. Suppose this microbe also causes increases in obesity, drug use, teen-pregnancy, incarceration rates, and homicide rates, and a breakdown of social cohesion. We would expect pharmaceutical companies and the Centers for Disease Control to engage in a no-holds-barred campaign to develop an antibiotic or a vaccine to do away with the threat and protect public health. The threat is here. It is real and it is causing untold harm."

He goes on to say, "" the threat is not a microbe. It is us, or more accurately, how we organize our social environment."   As the rich get richer and the poor get poorer, the greater the inequality within a society, the greater the physical and social damage existing to those in that society; to those on the bottom, to those at the top and to those along the entire continuum.  

Everybody knows income and wealth are not equally distributed, nor should they be. But Americans are very unaware just how economically unequal we really are. Duke University's Dan Areily and his Harvard colleague Michael Norton set out determine just how much Americans know about the distribution of wealth in this country.

In their report, Building a Better America -- One Wealth Quintile at a Time, they found the level of wealth inequality was dramatically underestimated.   The top quintile, the top 20%, was believed to hold 59% of the nation's wealth.   Study participants suggested 32% would be ideal.   The actual number is 84%.  

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Participants believed the mid-quintile held 11% of the nation's wealth while suggesting 22% to be ideal.   The actual number is 4%.

The bottom quintile was believed to hold 3% of the nation's wealth. The ideal was thought to be 11%.   The actual number is much much closer to a negative than it is to 1%.

Bard College's Edward Wolff, based on Federal Reserve studies, reports the richest 10% of us hold 73% of the country's net worth leaving 27% for those of us in the bottom 90%.

Wealth, if not inherited, is a function of savings and investment of income.   Inequality of income is measured mathematically by what is known as the Gini index which is sufficiently important to be determined by both the United Nations (U.N.) and the Central Intelligence Agency (C.I.A.).   A Gini of 1 would indicate that all of a nation's wealth is held by a single individual.   Were it 0, the nation's wealth would be equally distributed.

In a U.N. list of 127 countries with a Gini range of 24.7 -- 74.3, the U.S.A. ranked 127th with a Gini index of 40.8.   The C.I.A. ranking was 96th of the 137 countries with a Gini index of is 45.   The Gini range was 23 -- 70.

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Amongst developed nations, the U.S.A. has the highest level of income inequality.   Moreover, the income inequality is now higher than ever recorded, about on par with 1928 and just prior to the Great Depression.

Amongst lesser developed nations, the recent civil unrest associated with rebellion to the ruling class in Bahrain, Egypt, Ivory Coast, Libya and Tunisia has been widely reported.   According to the C.I.A. each, surprisingly, have a more equal income distribution than does this country.

Dr. Ritterman analogized the microbe with pathogenic social policy that has resulted in the achievement of towering inequality of income and wealth. This, Dr. Ritterman says, in the face of "" hundreds of papers and an excellent book, The Spirit Level: Why Greater Equality Makes Societies Stronger, by Richard Wilkinson and Kate Pickett, which document the health and social costs of rising income inequality.

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A retired MBA, I am a former corporate ideologue, former 3rd party advocate and current curmudgeon. While a continued supporter of a 3rd party, I have concluded their efficacy cannot be demonstrated until our form of Government is changed to (more...)

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