There has been a lot of conversation in recent years about income and wealth inequality in the United States. Almost everybody knows that our country has become far more unequal in recent years, but many do not know just how bad things have gotten. Probably very few know that inequality can actually be bad for your health.
Wealth inequality: perception vs. reality
Mother Jones offered the following chart in a story about inequality from 2011.
That chart reveals that most Americans would be ok with a country where the top 20 percent controls a somewhat larger chunk of wealth than everyone else. They think that the rich control a lot of wealth, but they have no idea that the rest of us control so little.
How does U.S. wealth inequality compare to other nations?
The following chart represents the difference between the incomes of the top and bottom 10 percent in each country. You can see that among the countries represented, the U.S. has a wider gap between high and low earners than all but three of the them.
The following represents something called the “Gini Index.” That is a measure of how unequal the income distribution of a nation is. Perfect equality, where everyone got the same income would be represented by a Gini Index of zero. Perfect inequality, where one person got all the income, would produce a Gini number of 100. (Countries in gray had no available data.)
The U.S. is nowhere close to being as unequal as many countries, but we are far more unequal than all of our western allies, including the UK, which has an official aristocracy. The U.S. has a Gini rating of 41.1, just above the world average of 38.8, and slightly lower than China, at 42.1.
In 1962, the ratio of the average wealth of the top one percent, compared to the median, or middle, wealth in the U.S. was 125 percent. By 2010, that ratio had skyrocketed to 288 percent. Most of that gain occurred between 2007 and 2010.
And look at what has happened to the wealth of the 400 richest Americans since 1989 (numbers are in billions of dollars).
Wealth inequality is bad for your health
In 2009, the British Medical Journal tried to estimate the number of deaths that could be expected due to inequality in the countries that belong to the OECD (Organization for Economic Cooperation and Development). According to Inequality.org, the researchers determined that over 800,000 deaths per year within the U.S. are linked to inequality. In other words, by simply reducing our inequality to the average of all OECD countries, we would save over 800,000 lives each year.
The gap between ‘haves’ and ‘have nots’ has grown tremendously over the past 30 years
This chart shows how much the share of total household wealth has changed among various income levels, between 1983 and 2010. Those from the fourth fifth on up have seen an increase in their share of the wealth, while those at the bottom have lost ground. The top five percent has done tremendously well. They have seen an almost 75 percent increase in their share of the wealth.
Have you noticed that most of the growth in wealth inequality has happened since the early to mid 1980’s? What could be the explanation for that?