Whether it is the Occupy Wall Street movement and its descendants or some other trigger, income inequality has become a theme in the US Presidential election for 2012. And judging from even a cursory search online, the issue has become a concern in many other countries as well. The case for the importance of income inequality as a social and health risk factor has been made in compelling fashion in books by British epidemiologists Richard Wilkinson and Kate Pickett entitled “The Spirit Level: Why Greater Equality Makes Societies Stronger”, and by Michael Marmot in his book entitled “The Status Syndrome: How Social Standing Affects Our Health and Longevity”.

Evidence Summary

According to Pickett’s remarks on the authors’ website (www.EqualityTrust.org), “there are now 170 studies of income inequality in relation to various aspects of health. Life expectancy, infant mortality, low birth weight, and self-rated health have repeatedly been shown to be worse in more unequal societies…Researchers sometimes disagree about the pathways leading from inequality to worse population health. The most consistent interpretation of all the evidence is that the main route hinges on the way inequality makes life more stressful. Chronic stress is known to affect the cardiovascular and immune systems and to lead to more rapid aging. Inequality makes social relations more stressful by increasing status differences and status competition. These effects are important: Americans living in more equal states live around 4 years longer than those living in more unequal states.”

But the toll of inequality is not just on longevity. According to Pickett and Wilkerson, inequality is linked to other adverse health and social outcomes such as homicides, imprisonment, teenage births, trust, obesity, mental illness including drug addiction, and social mobility.

Other Statistics

In a recap of some of the recent reports, the Times described an October report from the Congressional Budget Office in the US which found that from 1979 to 2007, the average real after-tax household income for the 1 percent of the population with the highest incomes rose 275 percent. For the rest of the top 20 percent of earners, it rose 65 percent. But it rose just 18 percent for the bottom 20 percent.

A report from the Organization for Economic Cooperation and Development found that “the gap between rich and poor in OECD countries has reached its highest level for over 30 years.”

Disagreement On The Problem

Not everyone seems to agree that income inequality is a problem. In a recent report on the education gap between rich and poor children prepared by Stanford sociologist Sean Reardon and reported in the Times, critics of the report said that income inequality is “more of a symptom than a cause.” Also, Scott Winship from the Brookings Institute testifying in Congress in early February on income inequality, mobility, and opportunity gave the following example by way of criticizing the importance of income inequality.

Example

 “American inequality levels are viscerally bracing, but one still has to make the case that they are undesirable. Consider two men, one of whom makes 200 times the other. Should we be concerned about the poorer man? What if I told you that the two men in this example are [Facebook’s Mark] Zuckerberg and poor Mitt Romney (who made just 22 million in 2010)? Romney made over 400 times the typical American household in 2010. Should we be concerned about that household?...What really matters is how the poor and middle class are doing and how much opportunity they have.”

Inequality Or Fairness?

Americans may agree. Despite the evidence about income inequality, reports indicate that Americans have a longstanding sense of inequality, but it does not bother them since they see it as an acceptable or intended consequence of the economic system in the US. What bothers people more is a sense of unfairness in the system that favors wealthy people.

Fuller Picture

Perhaps as more of the consequences of income inequality become apparent, the tolerance for it may lessen. According to Wilkinson and Pickett, “the problems in rich countries are not caused by the society not being rich enough (or even being too rich), but by the material differences between peole within each societry being too big. What matters is where we stand in relation to others in our own society…Inequality, not surprisingly, is a powerful social divider, perhaps because we all tend to use differences in living standards as markers of status differences.”

The authors conclude that “understanding the effects of inequality means that we suddenly have a policy handle on the well-being of whole societies.”  Others are not so sure. According to Scott Winship, “…in a world of perfect equality, there would be no rewards for hard work or risk. That would cripple economic growth and hurt everyone.”  These different views will undoubtedly play out further in the upcoming US election.