And Now, Here's Why Income Inequality Really Is A Big Deal

America apple pie

Photo: Examples: (CC) Larry D. Moore or GFDL photo by Larry D. Moore or Image by Larry D. Moore, used under a Creative Commons ShareAlike licence.

People are talking a ton right now about income inequality, especially because Occupy Wall Street has brought the issue to the fore.But perhaps people aren’t talking enough about why it’s a big deal. After all, one common response people have, when presented with data about inequality is that America is an incredibly rich country (due to our capitalist system) and that even most of the “poor” are rich by historical and global standards.

And that’s no doubt true, but…

It turns out that even in a rich society, income and wealth disparity still matters.

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 video 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.

In other words, it doesn’t matter how big the pie gets, inequality ends up tearing away at society.

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

Around the world, there's not much correlation between wealth and various lifestyle outcomes.

What matters is the level of inequality WITHIN countries

Life expectancy is not related to average income

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 take pride in about our country the most — opportunity.

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

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