Income inequality


Obama said it best when he said we are all in this together.  It’s not about income redistribution, its about income fairness.  There is nothing fair about a company’s CEO’s portion of the company’s earnings being measured in millions of dollars of salary plus millions more in bonuses  while that portion of  the earnings of the company received by the workers (who’s work earned all of it) don’t receive enough to support a family on one income. 

Most of the following is excerpted from Steve Kangas’ web site. (Steve Kangas (Steven Robert Esh) 11 May 1961 – 8 February 1999. He died of a gunshot wound under unclear circumstances[6][7]. He was found on the 39th floor in the restroom of the offices of Richard Mellon Scaife (owner of the Pittsburgh Tribune) inside One Oxford Center, Pittsburgh. It was ruled a suicide by local police.))

The point of this posting is that we are all in this together whether we like it or not and we should be more considerate and supportive of each other.  Ignoring this kind of information is hazardous to the health of each and every one of us.  


“… between 1975 and 1992, the amount of national household wealth owned by the richest 1 percent soared from 22 to 42 percent.” Edward Wolff “How the pie is sliced: America’s Growing Concentration of Wealth,”The American Prospect 22, Summer 1995, pp. 58-64.

Both sociologists and biologists agree that humans compete for limited resources. Those with more resources are able to compete better and survive longer. We can see this in our statistics: in the U.S., the poor have six times the death rate of the rich.  That’s because people with wealth can afford better health care, better diets, better education and information, safer and less toxic homes and workplaces, more creature comforts, greater efficiency of survival, etc.

If it is true that poverty kills, then … A society that allows high levels of inequality could be accused of killing its own citizens. Conservatives defend against this charge by pointing out that the living standards of the poor have been continually rising, so it shouldn’t matter if the rich are growing even richer by comparison. …. Even a poor person with a small slice of the pie will benefit if the entire pie grows. 

However, it turns out that relative poverty matters a great deal …

In 1996, Harvard and Berkeley published separate studies that examined income inequality in all 50 states.  According to Bruce Kennedy, the lead researcher of the Harvard study, “The size of the gap between the wealthy and less well-off, as distinct from the absolute standard of living enjoyed by the poor, appears to be related to mortality.”  Both studies found that states with higher income inequality have all the following social problems:

  • Higher death rates for all age groups.
  • Higher rates of homicide.
  • Higher rates of violent crime.
  • Higher costs per person for police protection.
  • Higher rates of incarceration.
  • Higher rates of unemployment.
  • A higher percentage of people receiving income assistance and food stamps.
  • More high-school dropouts.
  • Less state funds spent per person on education.
  • Fewer books per person in the schools.
  • Poorer educational performance, including worse reading skills, worse math skills.
  • Higher infant mortality rates.
  • Higher heart disease.
  • Higher cancer rates.
  • A greater percentage of people without medical insurance.
  • A greater proportion of babies born with low birth weight.
  • A greater proportion of the population unable to work because of disabilities.
  • A higher proportion of the population using tobacco.
  • A higher proportion of the population being sedentary (inactive).
  • Higher costs per-person for medical care.

The correlation between income inequality and mortality rates for all ages was significant.

Both studies found that each state’s average or median income did not predict its mortality rate. But inequality turned out to be a significant predictor, and remained so even after accounting for such possible confounding factors as smoking and drinking rates, household size and household income.

Dr. George Kaplan, the lead researcher of the Berkeley study, says: “People might assume that states with higher income inequality have more poor people, and we know that poor people have higher death rates. [But] the evidence in these two studies suggests that the increased death rates in those states are not due simply to their having more poor people. Income inequality seems to be increasing mortality rates among nonpoor people as well …This effect on health wasn’t just happening to poor people; middle-class people were affected too. When we accounted for income differences, there was still a strong relationship between income inequality and mortality rates.”

The Harvard team concluded that if the U.S. reduced its … index of income inequality from 30 to 25 percent … deaths from coronary heart disease would be reduced by 25 percent. In 1993, the U.S. suffered 489,970 deaths from coronary heart disease; a quarter of that would have represented 122,493 lives saved for that year alone.

The results of the Harvard and Berkeley studies cohere very nicely with the international evidence. The U.S. has the most unequal society of all rich nations, and by far. These other nations have higher taxes and better-funded social programs to alleviate poverty, and their progressive social policies have resulted in more equal societies. So who has the worst health statistics, mortality rates, crime rates, sedentary lifestyles, economic growth and other social problems? The U.S.,

Some conservatives try to nullify this observation by playing the race card, … pointing out that blacks drag down the U.S. statistics. However, the U.S. still compares worse to other rich nations even when blacks are removed from the statistics completely. 

… between 1980 and 1990, the Gini index  of income inequality rose from .365 to .401.  (in 2010 it was at .440.)  (A Gini coefficient of zero expresses perfect equality where all values are the same; for example, where everyone has an exactly equal income. A Gini coefficient of one … expresses maximal inequality among values; for example where only one person has all the income. Is it really reasonable to believe that the personalities and morals of the poor worsened considerably in just one decade? The absurdity of this belief becomes all the more apparent when you consider the economic changes that occurred to the rich. During the 80s , the share of national income collected by the top 1 percent increased from 8 to 13 percent, an increase of over 50 percent.  Are we to believe that in just one decade, the personal and individual productivity, intelligence, education, health, virtue and work ethic of the top 1 percent grew over 50 percent?

During the 80s, Reagan slashed the top tax rate for personal income from 70 to 28 percent, allowing income to concentrate among the wealthy. And in 1983, regressive payroll taxes were raised on the working poor. Furthermore, between 1980 and 1993, family welfare payments were reduced from $350 to $261 per month in constant dollars — a 25 percent drop.

The argument that income inequality is largely caused by social policy, not individual merit, is one that has been endlessly developed in … abundant academic literature. And the implications should be troubling to every American: our society bears great responsibility for both its deplorable level of income inequality and poverty-related mortality.


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