Income Inequality

Slate has a fantastic, no, wait: terrifying 10-part series on income inequality in the United States.

All my life I’ve heard Latin America described as a failed society (or collection of failed societies) because of its grotesque maldistribution of wealth. Peasants in rags beg for food outside the high walls of opulent villas, and so on. But according to the Central Intelligence Agency (whose patriotism I hesitate to question), income distribution in the United States is more unequal than in Guyana, Nicaragua, and Venezuela, and roughly on par with Uruguay, Argentina, and Ecuador. Income inequality is actually declining in Latin America even as it continues to increase in the United States. Economically speaking, the richest nation on earth is starting to resemble a banana republic.

I stumbled across GINI coefficients (a measure of income inequality) a year or two ago that included US state inequality with other nations, only to discover that Michigan had the same GINI as the Philippines! It was startling, but at the same time it helped me to understand one reason why life here in Malaysia feels so comfortable, despite the fact that I make easily a fourth of what I would back home in US dollar terms: there isn’t much difference in the size of the gap between rich and poor. Which isn’t to say that the gap isn’t awful. It is, but it is an awfulness that I’m very accustomed to from life in the United States of America.

A vaguely related point about GINI and happiness is developed in Rebel Sell that I linked to previously:

Absolute wealth, above a certain point, is essentially irrelevant to happiness. There’s no correlation. But relative wealth is still correlated with happiness. So in other words while merely having money, can’t make you happy, having more money that other people provides a pretty good start.

But if that’s true, how come most Americans aren’t absolutely furious at the top 1% that have so, so ,so , much more than them? Americans have no idea how rich the rich are or how poor the poor are. Ignorance really is bliss.


One thought on “Income Inequality

  1. As a Canadian, I’ve always found the gap between rich and poor here in Malaysia to be pretty terrible. Not that Canada’s perfect though, as a CIA GINI coefficient of 32.1 (roughly on par with France, Italy, Romania, Tajikistan, and the EU as a whole, and only slightly better than Bangladesh and Egypt…and slightly worse, it seems, than Ethiopia).

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