The Causes of Poverty (50): The Structure of Income Inequality

It seems that one particular aspect of income inequality – namely the degree of inequality between middle income and lower income people – determines the degree of redistribution in a society, and hence the level of poverty of the poorest:

the key factor determining redistribution is the income gap between middle income voters and lower income voters. Where this gap is low, middle class people feel some degree of solidarity with the poor and exhibit what Lupu and Pontussen describe as “parochial altruism.” That is, they are more likely to support income redistribution because they feel that the poor are in some sense, “like them”. When the gap is high, middle class people will have a much weaker sense of solidarity with the poor, and hence be less supportive of redistribution.

Lupu and Pontussen suggest that the US is an outlier, with weaker solidarity than the structure of US inequality would suggest. They argue that the explanation for this is straightforward – “it is clearly attributable to the high-concentration of racial-ethnic minorities in the bottom of the income distribution.” More bluntly put – middle class Americans feel less solidarity with the very poor because the very poor are more likely to be black. (source, source, source)

Yet another reason to worry about income inequality. More posts in this series are here.


3 thoughts on “The Causes of Poverty (50): The Structure of Income Inequality

  1. I don’t bwelieve that crap about color or race or origins being the discriminate. Through my experience its not even pointed at one type of person or another but at a system and its creators. Its a pyramid scam. No matter how much money will go to help the poor,the rich get their part first, then down down down till when the payout comes it adds up to two dollars and thirtyfive cents. If you want change you gotta start with the system. Stop giving money out to buy food for people. Money always ends up buying guns and ammo. Send food instead. If someone trys to stop the flow of food or extorts and holds it hostage, you fly a plane into the region or village and drop it out the back. If your gonna put money in someones hands, start at the bottom cause it always works its way to the top.

    1. keith the system is at fault for the longevity of poverty but in America when slaves were set free, many of them had nothing. Many of them were told where they could live and where they could not live. This is when areas with high populations of blacks started to form (ie the ghetto). With no money, and no food and no resources..people would steal and commit crimes to survive. The cycle and mentality has carried on through today. Yes there are more resources for those that are in poverty now, but there are also a lot of other factors (quality of education in areas with low tax payer contribution, etc). Of course all ethnicities have their poor..but blacks and the culture of slavery definitely affect the demographics of poverty today.

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