This Is How Income Inequality Destroys Societies

rich poor

Photo: Wikimedia Commons

If you’re at the top, and you think that widening the wealth gap doesn’t affect you, let me put this gently: you are completely and totally wrong.Richard Wilkinson, Professor Emeritus of Social Epidemiology at England’s University of Nottingham, recently did a TED Talk about what he found while researching his book about income inequality, The Spirit Level. You can check out his whole presentation here.

The basic thesis is that social ills, like crime and teen pregnancy, that have long been associated with poverty, actually have a stronger correlation with income inequality.

Worst of all, income inequality eats away at social mobility. In Wilkinson’s own words: “If Americans want to live the American dream, they should go to Denmark.”

This is information that’s easy to ignore, but once you see the charts, you’ll see it’s not easy to deny. Income inequality is crippling and dangerous to our country and every country. The good news is that it doesn’t matter how you close the wealth gap, through taxes, like Nordic countries, or by equalizing pre-tax income by increasing company democracy, like Japan.

All that matters is that you close it.

First let's start with the basics. In the U.S. the richest 20% are 8.5 times richer than the poorest 20%.

That wealth gap is directly related to the world's most pressing social problems. The issue is not, as we once thought, a country's wealth as a whole.

Take life expectancy for instance. Within a country, it looks like the correlation between income and life expectancy is clear.

But here it is measured against GNP (kind of like treating countries as individual people). No correlation, as you can see.

Child well-being does the same thing when measured against GNP.

Now look at it up against income inequality by country.

This inequality permeates every part of a child's life, especially education. This is U.S. state high school dropout rates plotted against state inequality.

And of course, this correlation extends to violent crime.

Because there's more crime in general, people don't trust each other. That really hurts a country's (or state's, or city's) sense of unity.

You can even see this correlation in mental illness.

That could be because inequality makes individuals feel intense judgment and competition. These are the most stressful social situations for human beings.

Worst of all, it destroys the thing Americans pride our country on the most — opportunity.

And these are the places where you can see it all played out in front of you.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.