

American society is more unequal than those in most other OECD countries - known
http://www.economist.com/blogs/freeexchange/2011/05/income_inequality

======
JesseAldridge
You really gotta wonder how this is gonna turn out. How are dumb people
supposed to earn a living when technology makes all the jobs for dumb people
obsolete?

I guess we'll have a huge class of people that will basically get free money
through the state. But maybe that won't be so bad since wealth will be so
abundant?

~~~
tybris
1\. People aren't dumb

2\. Technology has created most of the jobs that exist today

3\. Most jobs it makes obsolete were created by technology in the first place

4\. Technology allows us to more with the same amount of people.

5\. Human civilization hasn't even started yet. You're suggesting we're
already done.

------
decadentcactus
There was an episode of QI where this was mentioned (can't find the video
now). It basically said the "happiest" countries (as best you can measure it)
were the ones with the lowest income inequalities (like Nordic countries).

~~~
olalonde
Might not be a causality relationship though.

~~~
mseebach
And then there's the strongly subjective nature of happiness. Can you really
compare the happiness of a Norwegian and a Texan in any meaningful way?

------
SteveJS
The paper this points to is the "OECD FORUM ON TACKLING INEQUALITY".
(capitalization in the paper) Post-colonic: "What drives it and how can policy
tackle it?" (I had to decapitalize.)

The paper explores a large number of factors, but it is diffult to see how the
base premise is anything other than Inequality needs to be 'tackled'. Where
destruction of the middle class is happening, that needs to be tackled.
Extreme poverty needs to be tackled. Creation of a middle class in countries
that lack it needs to be tackled. Inequality, however, is a metric, and one
that is oblivious to whether things are getting better or worse. Successfully
tackling inequality says nothing about whether the lives of people have gotten
better or worse, it merely tracks uniformity of outcome.

I'm very supportive of policies that prevent social instablity, and poor
outcomes. My libertarian streak is weak at best, and centered around a
distaste for government interfering in social policy. I'm unhappy with framing
this metric as problem, because it easily falls into the trap of helping make
people unhappy with otherwise good outcomes. The metric used is inherently
oblivous to outcomes that I think matter.

Churchill's "The inherent vice of capitalism is the unequal sharing of
blessings; the inherent virtue of socialism is the equal sharing of miseries."
applies here.

I can agree we should have distributive tax policies due to falling real wages
at the bottom, yet that point is obliterated by starting the debate with a
relative metric that I do not agree should drive the policy.

------
yason
When talking about this kind of inequality we usually mean financial
inequality.

Given a society where everyone at least has the possibility to have a home,
have food, and live a decent life (i.e. not do 16 hours of work per day or be
applied a different legislation for different people), I don't care how
inequal we are or how many hundred or thousand times more an executive makes
than the employee with the lowest salary.

"Fixing" a society by making it more "equal", mainly to shrink the income
distribution, doesn't magically help the poormost. Any "fixes" to the wealth
distribution are likely to sift down only to the nearest classes in the
continuum: the acquisition of any wealth extracted from rich would be a task
easiest for upper middle class.

Humans are likely to always form into a number of "lower" and "upper" groups:
if we can't do it with money, we do it by some intangible property such as
ancestry or nobility. Compared to those, I much prefer money.

Conversely, a person doesn't need much: we only need to guarantee some minimal
standard of living, should a citizen wish to receive it, and we can afford
that if we wanted. There's no reason to try and take on the impossible task of
"fixing" inequality: unless we gave an equal salary to everyone we would still
have some people who form the poormost group.

The only thing that does matter is how well the poormost are doing. We can fix
that if we want. Compared to them everyone else is doing just fine, equality
or inequality, more Porsches or less Porsches.

------
olalonde
Remind HN: Down voting isn't meant to express disagreement.

~~~
corin_
That pretty much went out the window quite a while ago, I'd estimate that
nearly all down votes on HN are used for that purpose. It's just more visible
when on a political topic than a tech topic.

------
corin_
Have to say that, as soon as I read just the title, my initial reaction was
"no shit". I mean, I love America, there's no country of the many I've spent
time in that I enjoy being in more, but social equality certainly isn't on the
list of reasons I love it.

Does anyone have any insight as to why Mexico was at the top of the list of
countries with growing inequality?

~~~
palish
If I had to guess randomly, I'd say it's because of the drug cartels.

~~~
andrewcooke
And the drug consumers elsewhere, maybe?

------
arethuza
I suspect that if you took the EU as a whole it probably have a much higher
amount of inequality than any one of its constituent states as the differences
_between_ these states are currently ignored (and they are pretty big -
compare the GDP per capita of Luxembourg ($81,800) and Bulgaria ($12,800)).

~~~
corin_
But within the EU they aren't "states" they are "countries". It would be just
as logical to take the Americas together and see how inequality looks when
you're spanning from the top end of USA to the bottom end of Columbia.

~~~
arethuza
Stricly speaking that is true - but there is free movement within the EU -
someone from one EU member state can live and work in any other member state
(with some temporary restrictions for states that have just joined) - so they
aren't like other countries. Also member states have already given up a _lot_
of their sovereignty to the EU.

We are continually told that the US is a terribly unequal society - I'm just
curious how things would work out if you took something like the EU (higher
GDP, much higher population) and compared it to the US.

Note that I am a European, I'm generally pro-EU but I think Europeans
generally unfairly criticize the US in this area when we actually live in an
increasingly shared society that clearly has its own issues with inequality.

------
spicycat
If you're rich and not happy, inequality probably is a large part of why. The
richer you get, the smaller the group of people exists that shares your
problems... and the smaller your pool of potential friends becomes.

------
pelle
My main response is So? Really it is well understood that the main reason for
high unequality in the US is relatively high numbers of poort immigrants. I'd
say that is a good thing, not a bad thing.

~~~
andrewcooke
is that true? i don't have any data, but i don't think it is. my understanding
is that immigrants in the usa typically move quite quickly up the social
scale. your problem is that you have a large class of _americans_ who have
somehow got locked out of any progress.

------
quadhome
But where can I find numbers on income mobility?

------
pitdesi
[http://economix.blogs.nytimes.com/2011/01/31/the-haves-
and-t...](http://economix.blogs.nytimes.com/2011/01/31/the-haves-and-the-have-
nots/) This chart puts inequality in some perspective for me...

The poorest Americans are still in the 68th percentile for world-wide
inequality.

I suspect that if you charted European countries on this map, the line would
start higher and end lower than the US, hence their lower Gini.

------
hootmon
All the snobby effete commenters who write off this trend, just wait until
enough people are marginalized and they decide to do something about it.

~~~
olalonde
Last time I checked libertarianism and free market capitalism is what's
growing in popularity, not socialism.

[http://www.theatlanticwire.com/global/2010/09/cuba-lays-
off-...](http://www.theatlanticwire.com/global/2010/09/cuba-lays-
off-500-000-major-shift-to-a-free-market/23054/)

[http://www.time.com/time/world/article/0,8599,2043235,00.htm...](http://www.time.com/time/world/article/0,8599,2043235,00.html)

[http://www.nolanchart.com/article8623_If_You_Pit_Ron_Paul_Ag...](http://www.nolanchart.com/article8623_If_You_Pit_Ron_Paul_Against_Obama_They_Are_Virtually_Dead_Even.html)

------
fleitz
It looks like the efforts to promote entrepreneurship have been successful.

In a truly egalitarian society wealth would be distributed by contribution to
society. And one should expect unequal distribution of wealth according to the
unequal contributions to that society. These studies presuppose that income
should be divided equally, it shouldn't, it should be divided fairly and
that's something that's very difficult to measure. There's nothing egalitarian
about taking money from people who've earned it and giving it to those who
haven't.

We could equalize income tomorrow by gov't decree but the real question is
whether that makes for a better society.

~~~
wladimir
Don't try to turn this into a strawman communism versus capitalism discussion.

I think most would agree that _some_ inequality is good. After all, people are
not equal. However, a too high degree of inequality will fuel social unrest.

It leads to a society in which the rich have to build higher and higher walls
to keep out the poor. Not my idea of a fun place to live.

~~~
abbasmehdi
I agree, it must be a mix, where you have the opportunity for growth at the
same time you don't get a free ride. However there is always and always will
be a bottom 20 percent that needs to be taken care of.

~~~
palish
Er. Why should the bottom 20% of society be "taken care of"? Is it because
we're afraid they'll turn into criminals if we don't? Because that would be
equivalent to paying off the mob.

Honest question.

~~~
corin_
My brain's not yet running this morning and I can't think of the term for this
point, but as it's now in my brain I'll come back and link to more details as
soon as I think of it.

The rough concept is that, when it comes to society/politics/law, you should
think as if you are yet to be born and don't know where in society you will
end up. So, you might become the richest man in the world, or you might live a
life in poverty and unemployment.

As to why it matters, should people dying of hunger in the third world be
ignored? Should we not care about homeless people who are sleeping in the cold
and wet and will have crazily low life expectancy and a terrible standard of
living?

I'm not sure where the 20% comes from or how accurate an estimate that is, but
the more fortunate should always do their part, whether through legislation
(such as taxation) or charity, to help the less fortunate. While different
people will have different views on many areas of this, such as to what extent
they should be helped, how badly off you have to be to deserve it, and so on
and so on, I think _very_ few would say that the bottom end of society
deserves no help at all.

~~~
palish
What I'm saying is, if people decide to donate their own money to charity,
then that's fine.

But I don't understand the attitude of "It's noble to steal money from some,
and redistribute it to others". It seems immoral.

~~~
ugh
This is one argument:

Every human deserves to live in dignity. If someone is unable to earn enough
money to live a dignified live, society has to provide the means, wealth has
to be redistributed.

What exactly living in dignity means and how exactly wealth should be
redistributed is certainly always up for debate but this is the basic outline
of a pretty standard argument. I would, for example, be very surprised if less
than a large majority of people in my native Germany agreed with the basic
argument.

Those who agree with the argument have compared the immorality of taking away
someone’s money with the immorality of not enabling someone to live a
dignified life and concluded that the second violation of rights weighs
heavier.

~~~
JonnieCache
_> Those who agree with the argument have compared the immorality of taking
away someone’s money with the immorality of not enabling someone to live a
dignified life and concluded that the second violation of rights weighs
heavier."_

This is the crux of the issue right here.

Another key point is that the usefulness (to the holder) of a given unit of
wealth is inversely proportional to how much total wealth they have.

$100 is worth _a lot_ more to someone who has $3 than it is to someone who has
$3,000,000. Therefore there is a certain utilitarian argument in favor of
putting the wealth where it will have the most benefit. And yes, I know
utilitarianism is horribly flawed when you force it to its logical conclusion,
that isn't the point here.

Think of it a bit like spreading fertilizer on a field. If you want a good
harvest, it doesn't really make any sense to distribute it in any way except
according to its need.

As the parent said: this is just one argument. I'm not saying that it is
conclusive, nor do I expect you to agree with it.

------
jasonkester
So, among this list of "societies with hardly any inequality", America is at
the top. Not really a surprise.

They sort of tip their hand by including Mexico, which should probably be on
the "societies with a bit more inequality than the West" list instead. If you
included every nation in the world, I wouldn't be surprised to see the USA
still sitting sixteen places from the right.

~~~
redthrowaway
Amongst first-world, developed nations, the us has the highest inequality.
Developing nations, with a rich established elite, little to no middle class,
and a massive lower class will obviously score worse than the us. They are
not, however, the countries by which we should judge ourselves. Look to the
productive nations of the world for an apt comparison, and you will see that
the us is an outlier with an ever-richer upper class and a shrinking middle
class. This brings the us in line with developing countries, which is hardly
where it should aim to be if the goal is long-term sustainable growth, the
benefits of which are not limited to a select few.

~~~
jasonkester
Exactly my point. Among nations with hardly any inequality, America may not
compare so great, but it's still a nation with hardly any inequality.

Go to downtown Portland today and you'll find young people from middle class
families living on the streets _by choice_. That's how good our safety net is.
You really can't get yourself into the same sort of poverty that you see in
most of the world here.

In most places, being poor means you're likely to die of starvation in the
near future. In the US (and other countries on that chart), it means you can't
afford a new television this year.

So sure, there's always room for improvement. But it's a bit silly to compare
the USA to places that actually have a big divide between rich and poor.

------
olalonde
Inequality of outcome is a small price to pay for liberty.

Milton Friedman has some interesting thoughts on the subject:

Friedman and Sowell on Equality <http://www.youtube.com/watch?v=WJBeuR0xEP8>

Milton Friedman - Redistribution of Wealth
<http://www.youtube.com/watch?v=MRpEV2tmYz4>

