Sunday, April 10, 2011

Why we should care about inequality (PART I)

This is the first of two blog posts on economic inequality in the United States.

Is this the America you know? (source)

I’m from a relatively privileged background. My parents are well-educated (they met and married during college), and I grew up in a house where one or both of them had a steady job. I went to public school in San Diego County in a mostly white suburb in a little town called Poway (the town is affectionately referred to as “the city in the country,” and we have horse trails and strip malls).  Throughout my life I have had friends that are mostly well-educated like myself, that come from similar backgrounds like me, and have similar families. Coming from this type of background, it's easy for me—and I imagine, for people like me—to believe that with few exceptions (e.g., bad apples or unlucky breaks), most people have the same family background as I do, face similar daily challenges, and are similarly happy with their lives.

The truth about life in America is that it is much more unequal than we realize. In what follows, I detail the evidence:

Inequality between the richest and poorest sectors of American society is at an all time high.  When dividing Americans into wealth quintiles, the top 20%—that is, the people who make the most money annually—actually possess more than 80% of America’s total wealth. In comparison, people at the very bottom (the bottom 20% of annual earners) possess less than half a percentage point of the total wealth in America. When we look at the growing wealth of American society, a similar pattern emerges: since 1979, 63.6% of the growth in American wealth has gone to the top 10% of American earners, compared to 36.4% of that wealth going to the rest of Americans. In short, America has an (extremely) unequal distribution of wealth across its citizens.
When the economy grows, the wealthy get wealthier.

Inequality in the United States also comes with great personal costs, especially to those towards the lower ends of the socioeconomic spectrum. For example, epidemiologists like my colleague Nancy Adler of UC San Francisco have found that mortality risks increase linearly as people earn less and less money. In other words, if your income is less than $15,000 annually, you are three times as likely to die of an illness/injury (rather than of natural causes) than a person who makes $70,000 or more annually. That is a staggering figure! Additionally, though life-expectancies have increased in the US from the high 70s to the low 80s since 1970, the gains in life-expectancy have gone almost exclusively to those at the top of the income spectrum. Wealthier people are living longer, poorer folks are not—this despite improvements in healthcare.
The rich are living longer... the poor, not so much.

There are a number of reasons why being less wealthy, less educated, and having less access to valued goods and services would lead to increased mortality (e.g., poorer healthcare, unsafe neighborhoods, etc…). Because of the many factors that relate economic inequality to mortality, it is my opinion that inequality is, and should always be, a major concern of industrialized nations like the United States. In fact, reducing inequality may in fact be a way to reduce health disparities between the haves and the have nots. Research supports the idea that reducing inequality will improve the health of less wealthy individuals. For example, according to Marmot (2005) and others, in Canada and in Scandinavian countries, mortality rates are less disparate between the poorest and richest sectors of society, and this is often indirectly attributed to the more equal distribution of wealth in these countries.

The optimistic reality about reducing economic inequality in the United States is that Americans actually want it to happen! In a study by Norton and Ariely (2011) Americans were surveyed about the ideal distribution of wealth in society. These Americans preferred wealth distributions that reflected greater equality of wealth between the richest and poorest people in the country.
Americans want to reduce inequality (source)

Of course, the pessimistic reader out there (such as yourself) might say that inequality between rich and poor is necessary in a free market. That is, to hire talented workers one needs to pay top dollar.

It is possible, that our economic growth and technological advancement does depend on a certain level of economic inequality, though I would argue that it is critically important to limit the extent of this inequality. Norton and Ariely’s research suggests that Americans agree with me. The participants from their study didn’t want equal distribution of wealth, just more equal distribution, giving a fairer (not an equal) share to poorer individuals.

Unfortunately, inequality in America—as it stands right now—is far beyond acceptable limits, and the evidence of this gross inequality is visible in our everyday lives: To illustrate, on Wednesdays when I travel to Berkeley from San Francisco, I stop by a coffee shop to get a latte. While I get my latte I pass the same homeless man who is panhandling for change. Each week, I buy a latte and go about my usual business and he panhandles for loose change. What sense does it make to live in a world where that happens every week?

Do you think reducing inequality can improve the health disparities between the haves and have nots? Let me know in the comments. In my next post I will talk about why Americans haven't made much progress in reducing inequality.

For more information:
Learn more about inequality in the United States
A documentary about the ills of human society
I'll be giving a talk about inequality and compassion at Stanford University on April 22nd. It's free to the public!



  1. What is interesting is that a study done by Charlice Hurst and Tim Judge of the University of Florida cites self-confidence as a factor when it comes to higher income and career satisfaction. Could self-confidence play a role in health as well, not only from a financial standpoint and being able to afford health care, but peace of mind.

  2. Thanks for reading Courtney, and for your observation about the link between self-confidence and career satisfaction/income! I agree with you that self-confidence may be one of the main psychological factors that links socioeconomic status to health.

    If you're interested, there is a book by the sociologist Annette Lareau called Unequal Childhoods. In that book, Lareau argues how and why the childhood environments of lower and upper socioeconomic status children lead to psychological differences in what we might call self-confidence. It's worth a look.

  3. While I am happy to see this topic being discussed, I find it rather sad that the connection between health care and socio-economic status is being questioned at all. Socio-economic status has been found to be associated with basically all social ills including literacy, health, self-esteem, overall happiness, and of course, mortality. The power that SES has in dictating every aspect of one's life is astounding and undeniable. In a psychology- focused blog such as this one, I would be more interested in learning about the psychological phenomena that exacerbate and/or combat this fearfully deterministic reality.

  4. Thanks for your comment, I can feel the passion in it. I also think that you are reading exactly the right blog if you desire to hear more about the psychological phenomena that exacerbate/alleviate socioeconomic influences on health! We'll delve into these issues more fully in later posts, as I share your passion in this area of inquiry.

    I do however, want to point out that as researchers, our job is to seek truth in the world. As such, we cannot assume that socioeconomic status is the root of all evil. Instead, we ask the question: what negative life outcomes are perpetuated by inequality? We have to ask (rather than assume), because objectively seeking those answers is the only way, in my view, to discover if inequality does indeed harm society. Otherwise our research becomes opinion and conjecture. I hope you continue to read the blog, and I look forward to your future comments!


  5. Iain banks said "[M]oney is a sign of poverty.". the reason I quote this is because I wish to disconnect the tendency to see money as wealth, as you have done here, it is not; It is a way to control and distribute wealth. The solutions I would suggest are completely divergent from your own views and would take us too far afield, I just wanted to put money into a more (as I see it) sensible context. Some of the "richest" comapnies in the world don't actually have any wealth, at all, and if money was too disappear, only a few companies would actually have anything to offer, and the former companies would simply evaporate.