Income Inequality is Bad for Society. Really Bad. (2024)

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Lisa Wade, PhD on January 24, 2012

The mysterious SocProf, who writes The Global Sociology Blog, offered a nice review ofRichard Wilkinson andKate Pickett‘s book,The Spirit Level: Why More Equal Societies Almost Always Do Better. Wilkinson and Pickett offer transnational research showing how, exactly, income inequality is related to bad outcomes on average. In other words, as SocProf puts it,“…egalitarianism is not a bleeding heart’s wet dream but rather the only rational course of action in terms of public policy.” The 11 graphs, available attheEquality Trust website,speak for themselves.

Societies with more income inequality have higher infant death ratesthan other societies:

Societies with more income inequality have higher rates of mental illness than other societies:

Societies with more income inequality have a higher incidence of drug use than other societies:

Societies with more income inequality have a higher high school drop out rate than other societies:

Societies with more income inequality imprison a larger proportion of their population than other societies:

Societies with more income inequality have a higher rate of obesity than other societies:

Individuals in societies with more income inequality are less likely to be in a different class than their parents compared to other societies:

Individuals in societies trust others less than people in other societies:

Societies with more income inequality have higher rates of homicide than other societies:

Societies with more income inequality give less in foreign aid than other societies:

Children in societies with more income inequality do less well than children in other societies:

The authors sum it up pretty simply:: “Th[e] dissatisfaction [measured in this data is] a cost which the rich impose on the rest of society.”

And they have a clear policy proposal relevant to the current economic crisis.

[This is] a clear warning for those who might want to place low public expenditure and taxation at the top of their priorities. If you fail to avoid high inequality, you will need more prison and more police. You will have to deal with higher rates of mental illness, drug abuse and every other kind of problems. If keeping taxes and benefits down leads to wider income differences, the need to deal with ensuing social ills may force you to raise public expenditure to cope.

Readers Ana and Dmitriy T.M. sent in a TED talk of Richard Wilkinson discussing the relationship between income inequality and social problems:

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology.You can follow her on Twitter and Instagram.

Comments 78

Andy — January 24, 2012

How much of this is driven by the simple fact that societies with high income inequality are likely to have a larger fraction of the population in poverty?

Always remember correlation != causation

It seems to me that poverty is likely the strongest causal factor in most of these outcomes. This is still evidence in support of more "taxes and benefits". No need to demonize inequality per se.

Yrro Simyarin — January 24, 2012

Once again - The Spirit level is not good science. Wilkinson twists statistics and cherry picks data to find his correlations, and misquotes at least one major economist as though to indicate that their work supports his.

Among other issues, they did not use the standard measure of inequality (GINI). Why? Because regressions run against GINI do not support their hypothesis! For example, if you compare life expectancy to GINI across all UN countries, or even across the OECD, there is actually a small positive correlation between inequality and life expectancy.

http://super-economy.blogspot.com/2010/02/spirit-level-is-junk-science.html
http://super-economy.blogspot.com/2010/02/spirit-level-is-junk-science-part-deux.html
http://super-economy.blogspot.com/2010/07/spirit-level-writers-caught-lying.html

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pduggie — January 24, 2012

Interesting examination of countries. What about US states? They seem pretty similar in terms of social spending, but there are better and worse states for income inequality. Utah has very low inequality. What can we learn from Utah on this?

What if the social harm causation is socialhom*ogeneity(which, i would guess based on the way countries come out here, with Japan's very low inequality) is correlated with income equality.

One of the bigimpedimentsto a welfare state in the US is racism, where the money for the poor gets spent on the 'other', and so it looked on aswasteful, instead of socially beneficial. Japan or Finland don't have that impediment: social welfare goes to help "the people".

Then there is always Daniel Patrick Moinyahan's quip about how proximity to Canada is one of the best predictors of socially equal outcomes in the US

Melanie S. — January 24, 2012

I would believe these graphs more if there were actual numbers on the x-axis. Reproducibility is one of the basic underlying properties of scientific research, after all, and it's hard to reproduce "low" vs "high" without even knowing if it's a logarithmic or linear scale, let alone what the range is.

Casey Pederson — January 24, 2012

Why don't the same countries appear on each of the charts?

Mrs. G — January 24, 2012

A few questions:
Graph 1 : In fact, Denmark, which is usually described (rightly so!) as "the best country blah blah" - has higher baby death ratio than much less equal countries. And what about Singapore?

Graph 2: While babymortalityis at least something that could be measured easily (either the baby is dead or alive), theoccurrencesof mental illnesses is a much more cultural thing: what is defined as a mental illness, how it is treated, if it is still considered shameful to try to get treatment, etc. Have you noticed that all of the supposedly sick societies are anglo/American ones? In fact, equal Finland and not-so-equal Hungary are notorious for high suicide rates; and equal Japan? has HUGE suicide rates, in fact the highest among the countries chosen for this graph.

Graph 3: again, the definition of drug usage is a cultural and legal one (with different legal cultures in, e.g., the Netherlands and some countries that would chop your hand for drinking alcohol). Also the admission of one (if surveyed) of drug usage is culture-dependant. In fact, many of the countries that are placed below the graph are ones where I would say the culture is much more conservative and family-oriented, and people might not admit into drug use if surveyed (and might also not live independently away from home in the ages in which most young Australians discover their favouritepastimeis smoking pot). By the way, another global leader in youth pot usage (according to own statements, which is as I said a problematic parameter) is Canada, that country that is so much more equal than its evil (but more sober) southern neighbour.

Graph 4: I have nothing to say here. This reminds me of how you guys call a national championship "The World Series". Next.

Graphs 5-7: later...

Graph 8: so actually, the US-Americans have more faith in their fellow men as the equal, yet suspicious, French? Well, once your country provides you with a good public transportation system like in France, you start to meet all kind of people, and lost your faith in humanity. I would say that more equality brings you close, at least in France, with people whoseldomshower.

Graph 9: I propose to declare Singapore not-a-society, since it refuses to go by the nice graphs. I will get back to the devious Singaporians later. But I also find it interesting that the third mosthomicidalsociety isequallyscary Finland (them again, when they don't commit suicide, the kill).

And I have promised to get back to Singapore, and here I am, noticing that this bad child of statistics is missing from some graphs. And then, I noticed that for some graphs, only some OECD (I think that was the idea?) were used. Perhaps because the others really screwed up the party?

Yes, the US is almost always veryconspicuous in the extremes. But given what Sociologists of Religion have always said, perhaps the US is a special case?

Just for the record, I am a big supporter of social-democracy, but not such a great fan of marking the targets and then analysing your data accordingly.

Lori — January 24, 2012

While I do think the authors have a strong point I have to say that there is some shoddy science too, at least in this short summary (cant tell about the book).

For once the measure of inequality itself is, as has already been mentioned very questionable!? I for one think, that Japan is shown as far too "equal", compared to much of the recent data I read. Then there is one graph about high school drop out rates which uses data from different US states as opposed to international comparison. So that means that north and south Carolina are different "societies"? I never knew.

Another thing is that outliers like Japan's bad "well-being of children" or "percent spent on foreign aid" or the appallingly high prisoner and homicide rate of the US need some explanation (which i really hope is in the book).

So yeah, correlation != causation

One point to take from the data: The US are WORST of the selected countries in (1) infant deaths, (2) mental illness, (3) prisoners, (4) obese, (5) social mobility (american dream anyone?), (6) homicides and second worst for (7) foreign aid (that about the "Christians give more" theory advanced by a former religious teacher of mine). Even assuming cherry-picking in the data, this is very unflattering. And Americans should really ask themselves what the hell they are doing wrong. Inequality is probably a good start.

Also, as someone who originally came from Europe, I have to say: the US (this goes to you Mr. Romney and other republicans) ... fares MUCH worse than European countries on most measures.

Maurizio Morabito — January 24, 2012

A BBC transcript to cure people from worshiping Wilkinson and Pickett:

http://news.bbc.co.uk/nol/shared/spl/hi/programmes/analysis/transcripts/11_10_10.txt

Anonymous — January 24, 2012

Most of these graphs have verifiable data, but some of them could be called into question. Rates of mental illness should be called rates of reported mental illness. Drug use also depends on candor. Meanwhile, child well-being doesn't sound very precise. However, on the whole, I am not surprised that income inequality has seriously deleterious consequences.

Ryan Goo — January 24, 2012

Heh. Singapore is the clear outlier here! (I never knew we were THAT unequal though...)
I'd like to know why we were missing from some of the graphs too- I hope the data wasn't cherry-picked!

Anonymous — January 25, 2012

I suggest never comparing the U.S. to any Nordic country unless you want to cry. Same for Japan too I suppose.

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Boss man — January 27, 2012

I sure wouldn't want to live in Portugal!

Boss man — January 27, 2012

Who knew the Greeks were so fat!

Adettman — January 27, 2012

Andy you can NEVER equate correlation and causation! You must not be a scientist!

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Depgirl — January 29, 2012

Makes me want to go live in Japan!

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Martin Hammerschmied — February 9, 2012

Assume musical people are more likely to play the piano. Further assume that musical people are more likely to be Beatles fans. Those facts are then correlated. One could assemble a nice chart and argue that being a Beatles fan obviously inspires people to play the piano. Which is bullsh*t. One would only disregard the common cause.

Multi-variate statistics is far more complex than what can be expressed with a correlation chart. Be cautious if someone argues on the basis of correlation charts.

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Eoin Garland — March 9, 2012

You need a graph to prove what we all know
in our hearts is true? Fairness = Happiness. All you need to do is look at the sales
of drugs to combat mental illness in fast growing economic countries. As the pace
of life, greed, consumption goes up the use of these drugs and accounts of
mental illness goes up. Out of control capitalism may not be the sole cause but
it’s a HUGE part of it.

Will Smith — March 9, 2012

You need a graph to prove what we all know

in our hearts is true? Fairness =
Happiness. All you need to do is look at the sales of drugs to combat mental illness in fast
growing economic countries. As the paceof life, greed, consumption goes up the use
of these drugs and accounts of mental illness goes up. Out of control
capitalism may not be the sole cause but it’s a HUGE part of it. Perhaps if we all slowed down, consumed less shared more .........well it aint gonna make things worse now is it?

Komninos_maria — April 19, 2012

Now IMF and European Union are suporting policies which will have a devastating effect on the societies of European South and Ireland ( PIGS) in the name of economic rationality all derived by the Friedman doctrines so well applied in Chile in the 70s. I wish Wilkinson and Pickett's book was made compulsury reading for the Eurocrats and their cronies at the IMF.

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yoursodumb — November 20, 2014

If you believe this, you have to be one.of the most gullible people to ever walk this earth. It's that simple. Sorry.

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Income Inequality is Bad for Society. Really Bad. (2024)

FAQs

Income Inequality is Bad for Society. Really Bad.? ›

Inequality is a complex concept and is difficult to measure. Excessive inequality can erode social cohesion, lead to political polarization, and lower economic growth. Learn more about the inequality, its causes and consequences and how the IMF

IMF
The International Monetary Fund (IMF) is an organization of 190 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
https://www.imf.org › Countries
helps countries in tackling inequality.

What is so bad about extreme income inequality in a country? ›

This is why high and persistent inequality is not only morally wrong, but also a symptom of a broken society. It can lead to entrenched poverty, stifled growth, and social conflict. This is also why the goals of the World Bank are not just to end poverty but also to promote shared prosperity.

Why should we worry about income inequality? ›

Inequality erodes the connections within and between communities. Rich and poor live in different neighbourhoods and go to different schools. This creates distance between them that generates distrust, social conflict and crime.

How does income inequality affect modern society? ›

Income inequality can result in a lack of opportunities for better standards of living and stable financial futures, and political and social upheavals. Income inequality studies help to show the disparity of income among different population segments.

What are the dangers of social inequality? ›

The effects of social inequality are: Lack of health care. Mental health disorders. Low graduation rates.

How bad is income inequality? ›

Income inequalities are not much better. The richest 10 percent today snap up 52 percent of all income. The poorest half get just 8.5 percent. The two new measures in the report look at ecological and gender inequality.

Is income inequality bad in the US? ›

Income inequality has long been a significant problem in the U.S., with a large percentage of wealth going to a small percentage of the population. Income inequality has been correlated with higher levels of crime, stress, and mental illness.

What are the 5 reasons for income inequality? ›

Market factors
  • Globalization. Main article: Globalization. ...
  • Superstar hypothesis. Eric Posner and Glen Weyl point out that inequality can be predominantly explained by the superstar hypothesis. ...
  • Education. ...
  • Skill-biased technological change. ...
  • Race and gender disparities. ...
  • Incentives. ...
  • Stock buybacks.

What are the 4 reasons for income inequality? ›

Income inequality is a global issue with several causes, including historical racism, unequal land distribution, high inflation, and stagnant wages.

Should income inequality be solved? ›

While there is still some disagreements of the best way to reduce inequality, there is a growing consensus that inequality should be reduce. Recently the IMF joined this consensus in finding that inequality reduces overall economy growth as well as challenges basic democratic principle and fairness.

Why is income inequality a problem in the US? ›

Inequality is a drag on economic growth and fosters political dysfunction, experts say. Concentrated income and wealth reduces the level of demand in the economy because rich households tend to spend less of their income than poorer ones. Reduced opportunities for low-income households can also hurt the economy.

What is the 1% wealth? ›

To belong to the 1% in America, your net worth would have to be about $5.8 million or higher, according to the new Wealth Report from real estate company Knight Frank.

Does income inequality cause poverty? ›

Rising inequality is a key driver of domestic financial instability that is typically associated with adverse growth, poverty and distribution impacts.

Is inequality bad for everyone? ›

But recent studies demonstrate that inequality is bad for everyone in society. Some of the pain is economic: The studies suggest that the inequality depresses economic growth, leaving less for society to divvy up — regardless of how its members decide to do so.

Is inequality a threat? ›

Rising income inequality and the threat to democratic support. Towering figures in the social sciences, from de Tocqueville to Robert Dahl and Seymour Martin Lipset, have theorised that inequality produced by economic activity has the potential to threaten the very foundations of democratic systems.

Is inequality necessary in society? ›

Myth #6: High inequality is necessary and good, as it reflects a functioning market economy, which ultimately makes everyone better off. Many academic studies show that a certain level of inequality of income and wealth is indeed the normal result of a well-functioning market economy.

Why is income inequality a problem in developing countries? ›

It can be a result of increase of wealth for the rich while the poor have less or no improvement in their living standards (Gillis, 70). This uneven distribution of income is referred to as income inequality.

What is extreme income inequality? ›

Extreme inequality is a form of economic violence that is perpetrated when structural and systemic policy choices are made for the richest and most powerful people. This causes direct harm to us all, and to the poorest people, women and girls, and racialized groups most.

How bad is wealth inequality in the world? ›

Oxfam's new report, Inequality Inc., explores the disparity between the uber-wealthy and the rest of society. Since 2020, five billion people have become poorer, while the world's five richest men have more than doubled their fortunes—at a rate of $14 million per hour.

Why is income inequality bad for growth? ›

As income levels increase, human capital becomes more important than physical capital, and inequality tends to impede economic growth by affecting human capital accumulation.

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