Income Inequality (11): Why Should We Care?

It’s a fact that many rich countries – rich in terms of total GDP – have a substantially unequal distribution of income; or, to put it in other words, these countries accept that there is huge inequality of wealth between people. It’s also a fact that, in many countries and particularly the U.S., these inequalities in income or wealth have become wider over the last decades.

What’s the problem, you may ask. Well, according to me this inequality poses some problems. But these problems are of relative importance. More important to me is the problem of absolute poverty. Absolute poverty is a lack of certain resources that are necessary to meet certain basic needs. This is not a problem of inequality. People may live in a very unequal society and at the wrong end of inequality, but they may nevertheless have no problem whatsoever meeting their basic needs.

More important as well, in some aspects at least, are the problems posed by other types of inequality. Gender inequality in some countries may be much more of a problem than income inequality (although these different types of inequality are probably connected).

Nevertheless, income inequality engenders some important problems. One is self-esteem. People suffering from relative poverty – i.e. finding themselves on the wrong end of an unequal income distribution – may suffer psychologically and emotionally. It’s also likely that their relative disadvantage isn’t very fair. In other words, it’s probably not solely based on questions of merit and desert. We don’t live in a world of equality of opportunity and level starting conditions. There’s also a correlation between relative and absolute poverty, so we may have to worry about relative poverty as a cause of absolute poverty.

Income inequality can also cause a problem for democracy. The rich can use their financial means to pervert the democratic procedures and to distort the equal influence on which democracy is based. Another way in which income inequality may pervert democracy is its divisiveness. It polarizes societies and it can antagonize regions within countries. None of this is helpful for the adequate functioning of democracy.

More on income inequality here and here.

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15 thoughts on “Income Inequality (11): Why Should We Care?”

  1. Ya, I get by ok on 17 grand here in the States. It certainly though was not my first choice to end up getting a check. But I could be dead without it. But you can bet I am working as hard as I can to fix what broke me. I call what broke me stone throwing from a MEDIA-RIGHT-STORM…

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  2. First of all, I want to say that this is quite an amazing website. All the information and resources are great. I also appreciate your incorporation of so many different areas of thought, from statistics to philosophy.

    In terms of this post, two thoughts come to mind. First, discussions of inequality always seem to talk about income inequality. Why? Isnt inequality of wealth a much greater determinate of inequality of opportunity and well-being?

    Also, you mention other types of inequality, including gender inequality. In the US today, the average net worth of the average white family is TEN TIMES, the average net worth of the average black family ($81,000 to $8,000). Moreover, this inequality has important historical roots, including FHA redlining.

    These issues are discussed in more detail here:

    http://talktostambrose.wordpress.com/2009/10/12/aint-so-simple-housing-privilege-and-wealth-inequality/

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