Economic Inequality

Why Do People Tolerate Income Inequality?

In 2012, the late Alan B. Krueger, who was at that time the chairman of the Council of Economic Advisors, gave a speech that highlighted income inequality as one of the major causes of social ills in American society. It was then that he first presented what is now widely known as the Great Gatsby Curve,

Democratizing Economic Power to Break the Cycle of American Inequality

The US democracy crisis is not only a matter of voting; it is also a deeply economic crisis. The sharp and growing imbalance between the wealthy and the rest of Americans dramatically alters how public policy itself is formulated—and what those policies ultimately look like. American politicians and policymakers are consistently more responsive to the

Why US Inequality Is Higher Than Europe’s

Since 1980, income inequality has exploded in the United States, while remaining much less extreme in Europe. Yet each side of the Atlantic could learn from the other in tackling the problem, which is as much about predistribution policies as it is about redistribution. Europe’s political forces are divided between those who regard the European

The Finance 202: Why income inequality is such a huge topic

The reason inequality is emerging as a key flash point in the 2020 presidential election may be as simple as this: The gap between the haves and have nots has been growing for three decades and looks to be approaching a tipping point. The situation, and the political debate swirling around it, has grown so acute that Torsten

Does Income Inequality Drive U.S. Mass Shootings?

Communities experiencing growing levels of income inequality are at a heightened risk for mass shootings, according to a study in the upcoming December issue of the BMC Public Health Journal. Although analyses of mass shootings, commonly defined as incidents involving three or more victim-related injuries, usually focus on the troubled mental health of individual shooters, the

Even Inflation Is Worse If You’re Poor

In an era of wild inequality, sputtering wages, and rising rents and health-care costs, the American working class has had one consistent financial respite: “stuff,” broadly defined, is cheap. Sure, workers might not be able to afford a decent apartment, a college education, or sufficient elder care for an infirm relative, or to ever, ever get sick. But burgers, leggings,

The United States of inequality: this timeline will help you keep track of how we got here

Post-World War II America experienced both the continuing benefits of the New Deal and the consolidation of the American labor movement. During this period the wages of the lowest- and highest-paid workers rose together, while the share of the top 10%’s income decreased–validating a growing popular belief that, in John F. Kennedy’s words, “a rising

Is America ready to tackle economic inequality?

Jimmy Wilson, a 49-year-old cook who works at a Detroit bar, is sitting outside on his break and fuming. “This doesn’t affect me at all,” he says, speaking about the Democratic debates streaming on the bar’s TVs. “I still have to go to work in the morning. I still have to pay taxes.” Wilson’s Corktown

The Widening Gap Between the Super-Rich and Other Americans

In August 2019, the Economic Policy Institute reported that, in 2018, the average pay of CEOs at America’s 350 top firms hit $17.2 million―an increase, when adjusted for inflation, of 1,007.5 percent since 1978. By contrast, the typical worker’s wage, adjusted for inflation, grew by only 11.9 percent over this 40-year period. In 1965, the ratio of

Virtual spaces mirror income inequality

Income inequality drives social segregation and polarization not just in urban neighborhoods, but in online communities as well. That is the conclusion of a new paper by the New England Complex Systems Institute (NECSI) published in Royal Society Open Science. Importantly, this societal fragmentation is more than just the top one percent versus the bottom

The Richest Americans Are Now Paying a Lower Tax Rate Than the Working Class

If you still happen to be wondering what’s causing the rampant wealth inequality in the United States, here’s a hint: The richest Americans are now paying a lower tax rate than the working class. The revelation is part of an analysis by University of California at Berkeley economists Emmanuel Saez and Gabriel Zucman, whose new

Income Inequality: What Do the Measures Really Tell Us?

You have probably seen the recent headlines saying that U.S. income inequality has reached a 50-year high. They are based on the Census Bureau’s latest report on Income and Poverty in the United States, published last month. The Census Bureau’s data, however, ignore taxes, as well as non-cash benefits such as Medicare. They measure inequality in a hypothetical

The Racial Wealth Gap Is Not Improving, But We Think It Is

Here's an interesting hypothetical. If you were asked to predict the magnitude of the racial wealth gap in 1963 versus 2016, what would you say? Has it improved, stayed the same, or gotten worse? This was the focus of a new article appearing in the journal Perspectives on Psychological Science. Specifically, a team of researchers led by Michael

“Just the Facts” Won’t Be Enough to Fight Income Inequality

The US Census Bureau has added another stone to the mounting pile of evidence demonstrating the degree of income inequality present in the United States. While the median household income has recovered to a level not seen for 20 years, the gap between rich and poor Americans remains disturbingly wide. The data collected as part of the

America’s Income Inequality Is Reaching a Tipping Point

Inequality is wrenching the nation’s poorest and richest households farther and farther apart, the Census Bureau reported on Thursday. The gap is now so wide that income inequality is the highest it’s been in 50 years, and the nation’s Gini index has increased to match. It’s now 0.485, an increase from 2017’s figures. To put

Income inequality highest in more than 50 years: census

Income inequality in the United States is at its highest point since data started being collected more than 50 years ago, according to Census Bureau numbers. The Gini index that measures income inequality grew significantly from 0.482 in 2017 to 0.485 in 2018, The Associated Press reported. The scale ranges from zero, exemplifying perfect equality, to one, if one

School poverty – not racial composition – limits educational opportunity

Fifty years ago, communities across America began efforts to make school districts more racially integrated, believing it would ease racial disparities in students’ educational opportunities. But new evidence shows that while racial segregation within a district is a very strong predictor of achievement gaps, school poverty – not the racial composition of schools – accounts

Researchers Say Transparency Could Help Address Income Inequality

A frustration of income inequality, at least for those under the great dividing line, is the attitude from above that somehow poor and lower-income people deserve their lot in life. There's a lack of empathy, according to Lawrence Mitchell, a professor of law who wrote about this a couple of years ago: "The working poor may

The Hard Part of Ending Inequality Is Paying for It

Buried among the storylines about global trade and political intrigue from the G7 summit last month is perhaps the most noteworthy one of all. Business for Inclusive Growth, or B4IG, a coalition of 34 multinational companies with more than 3 million employees and revenues topping $1 trillion, unveiled an initiative to tackle inequality with help from the

Median Retirement Income For Women 42% Lower Than For Men

U.S. households’ retirement difficulties are exacerbated by social inequality, according to a recent report, especially gender inequality—but improving retirement plan design could provide a partial solution. The median annual income for women aged 65 and older is 42 percent lower than that of men, according to “Closing the Retirement Income Gender Gap: The Opportunity Is