Recent Items

Guest Post: Inequality In America Is Worse Than In Egypt, Tunisia Or Yemen

Posted on by

Washington’s Blog

Egyptian, Tunisian and Yemeni protesters all say that inequality is one of the main reasons they’re protesting.

However, the U.S. actually has much greater inequality than in any of those countries.

Specifically, the “Gini Coefficient” – the figure economists use to measure inequality – is higher in the U.S.

[Click for larger image]

Gini Coefficients are like golf – the lower the score, the better (i.e. the more equality).

According to the CIA World Fact Book, the U.S. is ranked as the 42nd most unequal country in the world, with a Gini Coefficient of 45.

In contrast:

  • Tunisia is ranked the 62nd most unequal country, with a Gini Coefficient of 40.
  • Yemen is ranked 76th most unequal, with a Gini Coefficient of 37.7.
  • And Egypt is ranked as the 90th most unequal country, with a Gini Coefficient of around 34.4.

And inequality in the U.S. has soared in the last couple of years, since the Gini Coefficient was last calculated, so it is undoubtedly currently much higher.

So why are Egyptians rioting, while the Americans are complacent?

Well, Americans – until recently – have been some of the wealthiest
people in the world, with most having plenty of comforts (and/or
entertainment) and more than enough to eat.

But another reason is that – as Dan Ariely of Duke University and Michael I. Norton of Harvard Business School demonstrate – Americans consistently underestimate the amount of inequality in our nation.

As William Alden wrote last September:

Americans vastly underestimate the degree of wealth inequality in America, and we believe that the distribution should be far more equitable than it actually is, according to a new study.

Or, as the study’s authors put it: “All demographic groups — even those not usually associated with wealth redistribution such as Republicans and the wealthy — desired a more equal distribution of wealth than the status quo.”

The report … “Building a Better America — One Wealth Quintile At A Time” by Dan Ariely of Duke University and Michael I. Norton of Harvard Business School … shows that across ideological, economic and gender groups, Americans thought the richest 20 percent of our society controlled about 59 percent of the wealth, while the real number is closer to 84 percent.

Here’s the study.

Print Friendly
Twitter287DiggReddit0StumbleUpon0Facebook890LinkedIn49Google+0bufferEmail

103 comments

  1. Dennis

    Time to get some perspective here, anyone who thinks an average American is worst of than an average Tunisian or Egyptian needs a serious reality check.

    1. rd

      The irony here is that the very programs that the Republicans, Fox, Tea Party, and supply-siders rail against are the very programs that are preventing Tunisia or Egyptian-type of uprisings here in the US.

      If the elderly, poor, and unemployed did not have Social Security, unemployment insurance, food stamps, Medicare and Medicaid does anybody really think we would not have had riots in the streets and multi-million person marches on Washington over the past 2 years? 10%+ unemployment and underemployment, especially much higher unemployment for people under 25 years old, and poverty for a third of the population is a recipe for revolution.

      If the Tea Party wants to see a real revolt, have them eliminate the New Deal and Great Society programs. They are the only thing preventing 70%+ marginal tax rates on the wealthy.

      The US came close to something like this in the early ’30s. Regardless of the debate on whether or not New Deal programs were as effective on the numbers side as some claim, the fact is that they gave back a lot of dignity to people and gave the impression that there were responsible adults in charge. Psychology is important.

      This is why China is potentially a ticking time bomb. Their leadership will do ANYTHING to keep people employed with a roof over their head and food on the table. Failure to do that is burning government buildings and regime overthrow.

      1. clara marie

        I am 61.
        I do not qualify for food stamps.
        I do not receive unemployment (denied extension).
        I do not receive medical.
        I am broke and cannot pay my rent this month.
        I borrowed my rent last two months, no more loans.
        I have been looking for a job in southern california for over 8 months.
        I cannot speak spanish, which most of the jobs here require.
        My family has been in USA since 1640, with landgrants in VA.
        What should I do?

        1. Walter Westcot

          Start to read these stories with fresh eyes. We are told that incendiary ‘rhetoric’ caused the Tucson eruption.

          Stories like these don’t require cheerleaders and provocateurs. Somebody reading this is going to torch a McMansion in the Hamptons with the Hedge Fund manager still in his jammies.

          Then it begins in earnest.

          How many will lament the fire?

          1. Indigenous Centurion


            Hamptons with the Hedge Fund manager

            Wealthy folks do feel the potential treat of exasperation from the downtrodden. So far this uneasy atmosphere has not spilled over into any attempt to put our rulers back onto our traditional trajectory of quiet enjoyment of America the Beautiful for all of us. Since the melt-away I have doubled my tips and encouraged everyone to put in a good word to legislators for a return to larger personal exemption and larger standard deduction for everyone, a flat-tax-cut. Most government spending gets siphoned off mostly to foreign interests, but a flat tax break could relieve lot of resentment. So far our wise rulers have targeted tax cuts toward the excessively wealthy with the best tax code that money can buy. Historically, this is a very poor time for making a fatal fiscal policy mistake. Clamping down on the hopeless and the destitute should be postponed for better times. Should we also be letting a few political prisoners out of income-tax-prison? Should we spend more on protection against external enemies but less on domestic surveillance? Is there still time to prevent the kind of riots we suffered in Gary Indiana, Kent State U, etc.?

            Let’s just improve.

            Just do it
            !

        2. concerned

          her people who can over in 1640 were hard working , religious people
          today, people expect someone else to take care of them from cradel to
          grave. your ancestors would not be happy with you. thats for sure.

          1. laughingsong

            Concerned, you are lacking compassion and unhelpful. That response did nothing either to give good advice or further the conversation. And really, you do not know Clara’s story — and it does not follow that just because she is in this position, she did not work hard all of her life.

            And in 1640, many who ended up in her position simply starved and died of exposure. Are you saying that that world was better? Is that what we should return to?

          2. Charles

            My ancestors came here in 1621, Mr. Concerned, and I can tell you that they would tell you that you are full of manure. Their highest values were following the teachings of the Bible, among which are the instructions to love one another and to treat the alien among you with respect.

            The people who came here in 1621 would hate this generation not for its expectation that people would care for one another, but for the fact that they do not.

        3. aidan

          Having met many people in a similar situation at my previous job, I can give you an idea of what we suggested that they do. Even though you don’t qualify for food stamps (and I’m not sure why you wouldn’t if you have no money), you can go to food banks in your area, which will give you a bag of groceries. Many churches have emergency funds for people who can’t pay rent (although many are tapped out) and of course there are shelters in case you become homeless (many would turn you away if you were an undocumented immigrant).
          In terms of medical, if you have no money, and are not a recent or undocumented immigrant (clearly you’re not) then you probably do qualify for Medicaid in case you are sick or injured.
          While you are in an extremely difficult situation, you actually are able to qualify for these safety net programs from which most recent immigrants are excluded.
          Another point – regardless of your income, you are able to join a local community organization, which can point you towards some of these supports, and join in the fight against those who have sought to end benefits for the unemployed, and against those who seek to keep low or no income people like you fighting against each other, while they keep building up their own wealth. Good luck!

        4. eric anderson

          What should you do? Stop looking for a job in California!

          North Dakota is cold, but unemployment is low. A friend of ours who was unemployed for over a year found work recently in Wyoming.

          California? Prospects not so hot.

        5. ewrwerw

          If you are broke and living in California you do qualify for food stamps and Cash Benefit Transfer. Just walk in and tell them you don’t have money, period. Fill out pieces of paper that indicate this. You will be able to walk out with and emergency EBT card. Good luck.

        6. avgJohn

          First of all don’t blame yourself. Circumstances, fate and a troubled world have worked against millions of people just like you. Bright, decent hard-working people, that for lack of knowing the right people or contacts, working in the wrong industry, poor luck, or a host of other possibilities find themselves in a financial pickle.

          I’m sure being human, if a decent position was offered or any other opportunity to rise above your current situation, you would jump at it. And believe me, there are plenty of unsavory Wall Street characters, drug dealers, and flim-flam artists out there who make a lot of money but lack your character. It’s just that in a sick culture such as ours, money is what counts, so hold your head up.

          But you are 61 and you have to be realistic and assume that a job opportunity is not going to happen.

          Second of all, realize that most of America does not understand your situation. By and large most people are decent, but for the most part can’t put themselves in your position, because they simply lack the experience (thinking any material comforts they have gained are due to their own extra-ordinary talents and hard work, and any losses they suffer is because of those Wall Street crooks or those rotten politicians, when the truth of the matter is they may be or have been a laggard on the job the company wanted to get rid of, or they were drinking buddies with the bosses supervisor, or related to the Presidents wife, or something else on those lines. Maybe they have some sort of job where they are a body that shows up everyday and collects a check, but it happens to be in an industry or job that pays well.

          You are 61 and will soon be 62, so prepare to file for social security benefits. Check on any retirement packages from previous employers. If you don’t have a drinking or drug problem, call local shelters.Run personal ads and make inquiries about other retirees in similar circumstances. Perhaps you could execute a personal note with several other people in a communal living arrangement, promising to pay back rent and utilities when you formally retire. If several of you share a household, there is no reason you couldn’t live comfortably but modestly on a small pension. Look forward to doing a lot off reading, a hobby, relax and enjoy yourself.

        7. rootless

          What about learning speaking Spanish? From what I see from your posting, if it is truthful, this seems to be an important job requirement. So it would improve your chances.

          And for what is it relevant that your family had been in USA since 1640, with landgrants in VA?

  2. Marc

    Uh, Dennis – time to get some reading comprehension here.

    The point is not that the average American is worse off than an average Egyptian or Tunisian. The article is about income distribution.

    1. Peter in Kobe

      The problem is capitalism almost always leads to crony capitalism. I hear they can be separated under ideal conditions in the lab though.

      1. W.C. Varones

        No, the problem is big government inevitably leads to crony capitalism.

        The more power government has, the more incentive there is for the wealthy to co-opt it for their own purposes.

        Capitalism and limited government worked great for most of the 20th century.

        1. Bryan

          Huh? America for most of the 20th century had a much more accepted and effective regulatory scheme. Besides the fact that the greedheads seemed to be less egregious in their larceny, Americans after the great depression accepted that the government, as a representative of them, needed to be strong in its capacity to reign in the mendacious and maintain a strong regulatory framework. That framework has been dismantled piece by piece over the last 30 years. How are you liking the results of that?

          1. eric anderson

            Yes, but a small, limited government would have been unable to bail out the crooks, putting a limitation of their evil.

        2. Binky Bear

          This seems to contradict historic reality. The 20th Century was about nothing but the struggle between representative government and the forces of capitalism, from the Pure Food and Drug Act through the Progressive Movement, two wars in which the government took over control of major industries with positive results for those industries (US Railway Administration which standardized rolling stock, financing and operations; War Production Board), through the New Deal, post-WWII efforts to raise America’s standard of living, the War on Poverty, the rise of military Keynesianism on the right which allowed them to indulge the fantasies of their base and the overt convergence of government and capitalism following Reagan, creating a kind of postmodern Fascism with which we are living today, where few question the concept of the government being in service to industry for the benefit of the few, per several Republican congressmen.

    2. Parvaneh Ferhad

      You are making a distinction where there is none. Cronyism is built-in by design into Capitalism.You have some who control and many more vassasl or cronies who work for their lords.
      It all has to do with the accumulation of wealth to ever fewer people. This also is inherent to Capitalism.

      1. Walter Westcot

        Hence the torched McMansions in the Hamptons – with the Hedge Fund Manager still in his jammies.

        Any bets on how many will cheer?

    1. Jessica

      The pattern of cheap immigrant labor goes back at least to President Reagan or Carter. It has in fact been a common pattern throughout American history.
      When you attach President Obama’s name to something that did not start under his watch, that makes me take you less seriously.

      1. Dan

        It is not the real immigrants that are the issue. It is the virtual immigrants by shipping jobs overseas in pursuit of profits (which also seem to reside overseas until they are big enough businesses can use them to lobby for a “tax holiday”).

        1. Jim the Skeptic

          Dan said “It is not the real immigrants that are the issue. It is the virtual immigrants by shipping jobs overseas in pursuit of profits (which also seem to reside overseas until they are big enough businesses can use them to lobby for a “tax holiday”).”

          I agree that the worst culprit has been shipping jobs overseas.

          But illegal immigrants do serious damage to the income of US workers in the bottom 10% income bracket.

          1. Walter Westcot

            So voters have a choice. If we vote GOP – we get outsourcing, cronyism, perpetual war, stealth support for illegal immigration, and ever increasing inequality.

            BUT

            If we vote O again… we get outsourcing, cronyism, perpetual war, virtual support for illegal immigration, increased inequality – AND

            A Lesbian on the Supreme court

            The Dream Act

            And mandatory Health Insurance – brought to you by the same Insurance companies we loath.

            Take your pick

      2. W.C. Varones

        The buck stops here.

        Obama isn’t the first president to support cheap illegal labor, but he’s the man in charge now and he is the man who is supporting cheap illegal labor now.

          1. M

            Here in ithaca, NY, many people have veggie gardens, and sell their extra produce. There are also plenty leftovers for the food bacnk. So, no, a head if lettuce will never cost $10.

            But, we still do have an undocumented workers problem here. They are literally trucked in to act as dish washers and kitchen aids in some of the local food joints.

            I would say that the root problem of the U.S. is an overall dumming down of the population, an inability to think through complex situation, a tendency to let emotions drive are thinking. Once the thinking leads to uncomfortable solutions, people simply stop thinking.

          2. M

            Apologies for the typos in my previous post.

            The solution, implicit in my problem identification is re-educating each and everyone, helping people understand that thinking requires time, and can be sometimes make us uncomfortable.

            I attended a viewing of the movie, “Inside Job” at Cornell University and it gave a rather sad impression of what’s going on at our elite universities. A law professor had volunteered to lead a discussion after the movie, and the end result was that many of his students showed, to please him, I presume, and score brownie points. They did not want any discussion of the implications or background of the movie. They just were there to “listen” to what their professor had to say. Their eyes were on the grade that they intended to get in this class. (I talked with some of the students, and heard them talking to one another and the professor in question.

          3. Walter Westcot

            this post [should anybody discover the source] is by someone who does NOT want to pay American wages.

            It’s always the beneficiaries of slave labor who defend it.

      3. Jim the Skeptic

        Jessica said: ” The pattern of cheap immigrant labor goes back at least to President Reagan or Carter.”

        There was an immigration reform act back in 1986 to deal with 3 million illegals. The Federal government granted amnesty and promised the American people that it would not happen again. Now there are 15 million illegals.

        I blame Clinton, Bush, and now Obama for failing to tighten up the border and punish businesses who hire illegals.

        Where there is a will, there is a way! But Obama doesn’t have the will.

        1. HJ James

          Jessica said: “The pattern of cheap immigrant labor goes back at least to President Reagan or Carter.”

          http://www.history.org reminds us that: “At the dawn of the American Revolution, 20 percent of the population in the thirteen colonies was of African descent.” One Wikipedia entry notes that, prior to the introduction of slavery here in America, indentured servants were used as the needed labor on plantations. “However, colonists began to see indentured servants as too costly, and in 1619, Dutch traders brought the first African slaves to Jamestown.” After slavery was made illegal here, the pattern of cheap immigrant did not stop in the intervening years until President Reagan or Carter assumed office. Another Wikipedia entry notes that: “While immigration has increased drastically over the last century, the foreign born share of the population was still higher in 1900 (about 20%) than it is today (about 10%).”

          A pattern of cheap immigrant labor occurs independently of who is running the government. Cheap labor, immigrant or otherwise, or (even better yet) less labor, is a preferred value of business. Do the Jessica’s of America want their government to regulate/reduce the profits of business?

  3. highwaytoserfdom

    Reference frames for measurement might be in order. I do think the FED recklessness to pump stock market pushing up food commodities having a profound inflation effect around the world. Too big to fail should be liquidated.

  4. W.C. Varones

    To second Jeff’s point, the whole concept of the Gini Coefficient is asinine.

    The Soviet Union was awesome on the Gini Coefficient.

    If you lift everyone out of poverty, raising the poorest up by 20% but the richest go up 30%, that’s a bad thing by the Gini Coefficient.

    The Gini Coefficient is a leftist academic model of class envy.

    What matters is improving the lives of the poor, not whining about how much better off the rich are.

    1. Francois T

      Projecting much?

      Anyone who really knows statistical measurements in social science knows the limits of the Gini coefficient:

      1) measures inequality of income, it does not measure inequality of opportunity.

      2) Gini of a poor country does not have the same meaning than the one of a rich country. It measures two different things.

      3) There is an area size effect at play when interpreting the Gini coefficient: For a large, economically diverse country, (such as the USA) a much higher coefficient will be calculated for the country as a whole than will be calculated for each of its regions. I do not know if there is GC available for different regions of the US.

      These are the most basic caveats BTW. On the top of my head, I can think of 6 others.

      Furthermore, there are plenty of other complementary measures of inequality, human development and poverty, such as the Pareto distribution, the Robin Hood index, Human Poverty Index, ROC analysis and so on and so forth.

      Hence, your statement that it is merely a “leftist academic model of class envy” is utter partisan hack bullshit. It is a measure of income dispersion among others, nothing more, nothing less.

      1. Paul Tioxon

        Here is a simple left wing model of misery.

        http://www.gfmag.com/gdp-data-country-reports/158-tunisia-gdp-country-report.html#axzz1COs2qEiO

        Tunisia has about $9BB in foreign reserves. In America, one man, John A Paulson made $5BB in personal income last year and another $4BB in 2007, helping to destroy the world financial system, when he shorted the mortgage wholesalers of Wall St. He has more money than that entire nation holds in reserve. He manages a fund that at $36BB, approaches the entire economy of Tunisia at approx$46BB. The inequity between one man in America, and an entire nation that just toppled its government over inequity is so staggering, that I am sure that if I devoted as much time to this analysis as I do to brushing my teeth, an algorithm could be produced to demonstrate a 1:1 ratio.

        Or here is my favorite, a ratio of municipal budgets to Ivy League University budgets within the same municipality. By this ratio, John Paulson has another 1:1 ratio, if you compare his 2007 $4bb salary to the annual budget of Philadelphia and his 2010 $5BB salary to the UofP, we arrive at another 1:1 ratio. So, not only is this one man greater than some Tunisia dot on the map, but he compares favorably with the entire municipal budget for the core city of the 9th wealthiest urban region in the world.

        http://www.citymayors.com/statistics/richest-cities-2020.html

        As well as an the yearly expenditure for an Ivy League school. How is that for outrageously unequal. I mean, gee golly willikers, we haven’t seen this kind of capital accumulation since the Nazi Arryanization of all of European Jewish Wealth. I mean, you’d have to go back to Julius Caesar, Mark Anthony and Lepidus unloading the Egyptian Dynastic Gold treasury of 2500 years of accumulation.

        And that is just one example, don’t get me started on the domestic resource extraction process industries.

        1. onepageturned4you

          What an idiotic post.

          Looking over your posts here it seems to me we should have a minimum age requirement in this forum.

          Your parents aren’t doing their job.

          1. anon2

            Dan Duncan, er, I mean, onepageturned4you says:

            “What an idiotic post.

            Looking over your posts here it seems to me we should have a minimum age requirement in this forum.

            Your parents aren’t doing their job.”

            Strange. This sounds exactly like a Dan Duncan post.

          2. Tamara G Ecclestone III

            Dan Duncan, now stop pretending to be onepageturned4you, apologize to all those nice people you’ve insulted today,
            then get yo’ sorry sociopath self back in here and take your meds!!

      2. Dan Duncan

        Francois T writes: “Anyone who really knows statistical measurements in social science knows the limits of the Gini coefficient….”

        Reading that Francois T is an authority on the Gini Coefficient aroused both skepticism and laughter.

        Pretty standard, though…so I didn’t think much of it.

        But then Francois T doubles down on his statistical economic prowess by stating:

        “Anyone who really knows statistical measurements in social science knows the limits of the Gini coefficient….”

        A bit too much, so I figured what the hell. Something stinks here…I just gotta give Wikipedia a look.

        Sure enough, Francois T, the expert on Gini Coefficient simply lifted his comment straight from Wikipedia:

        http://en.wikipedia.org/wiki/Gini_coefficient

        The Wiki entry lists 9 “Disadvantages” of the Gini Coefficient. The first 3 disadvantages in the Wiki entry are the same 3 that Francois T listed and he listed them in the exact same order.

        And when Francois T states: “On the top of my head, I can think of 6 others….” Gee, it just so happens there are 6 remaining disadvantages in the Wiki post.

        Not that there’s a problem in citing Wikipedia, mind you. It’s just that when Francois T made it an explicit point to let everyone know this is knowledge “off the top of his head” and that “anyone who knows anything” BLAH, BLAH, BLAH…while there is no doubt that Francois T was ignorant of this subject matter himself….it’s annoying.

        Then, as it becomes apparent that Francois T was so intellectually lazy that he just cut and pasted from Wikipedia…BUT NOT SO LAZY…that he actually took the time to change the word order so he could come across as more knowledgeable than he really is….

        Well…that’s just freaking hilarious.

        Francois T takes pseudo-intellectual pretense to a whole new realm. These kind of snobby dorks used to nauseate their readers by regaling them with information gleaned from reading a single book on a subject.

        But, pseudo-intellectualism is like slime-mold. It adapts on the fly. In an environment where competitors are continually vying to be the King-of-Pseudo-Intellectual-Dorkdom…taking the time to actually read a book will get you left behind. So, the Psuedo-intellectual-dork becomes more efficient and survives by simply watching a documentary or a 60 Minutes segment on a particular subject.

        And now, with Francois T, the slime-mold of the Pseudo-Intellectual-Dork gets its sustenance by…Cut and pasting Wiki-Freaking-Pedia.

        You can’t make this shit up.

        1. DownSouth

          Dan Duncan,

          I’ve noticed that your commentaries are heavy on rhetoric, narrative and emotion, but light on content. This one is no exception.

          You attack Francois T for some perceived formalistic crime, but fail to counter the content of his argument. Why is this so? Is it because you lack the knowledge to make substantive rebuttals? Is it because you’re just too lazy to put in the necessary work to make substantive arguments? Or is it because substance undermines your ideologies? After all, when one lacks the ammunition to attack the message, the only other option is to shoot the messenger.

          1. DownSouth

            Yea right. It’s a “dandy takedown” if one is into the Glenn Beck/Shawn O’Hannity/Rush Limbaugh style of argumentation, which is to attack the messenger and not the message.

          2. onepageturned4you

            Funny, Not one of you has bothered to address the argument, but rather choose to attack the messenger.

            Hmmm. Who else does that?

            Oh yeah. Rightwing knuckleheads.

        2. anon2

          Dan Duncan said:

          (excerpted from his post):

          “Reading …. aroused both skepticism and laughter.”

          “BLAH BLAH BLAH”

          “….it’s annoying.”

          “… was so intellectually lazy… ”

          “Well…that’s just freaking hilarious.”

          “…pseudo-intellectual pretense
          …snobby dorks… nauseate”

          “…pseudo-intellectualism is like slime-mold… It adapts on the fly”

          “….King-of-Pseudo-Intellectual-Dorkdom……. Psuedo-intellectual-dork….”

          “….the slime-mold of the Pseudo-Intellectual-Dork….”

          “You can’t make this shit up.”

          And there you have it: a typical Dan Duncan post, consisting of nothing but insults and personal attacks (calling someone a pseudo-intellectual dork, repeated three times), and yet the post itself is devoid of any substance.

          What a spiteful, embittered person this Dan Duncan must be.

        3. skippy

          Aww Dan Duncan is just sad in side, he needs a *group man hug* to make it better.

          UMMMMMM…*I love you Dan!*

          Every one give Dan a hug please.

          Skippy….BTW that wasn’t my hand squeezing the Charmin.

    2. Peter in Kobe

      Unfortunately, class envy is a real thing. It has nothing to do this leftist thought. Once more, subjective reality is the reality for that subject. Their perception may be able to be changed, so too can their circumstances.

    3. purple

      The lives of the poor in the US aren’t getting better. Or for that matter, about 90% of the population.

      But it’s all OK as long as our ruling class can strut around the earth making profound but duplicitous speeches.

    4. kievite

      The Soviet Union was awesome on the Gini Coefficient.

      People who have no clue about the economics of Soviet Union should never mention it as argument in economic discussion to avoid embarrassment. This was a feudal/slave society with theocratic rule. As such it has Gini coefficient close to one.

      That means that Gini coefficient of the USSR was much higher that the USA as a very narrow class called nomenklatura owned everything in the country. While ratio of low paid to highly paid employee was only around 20, the perks that come with the “nomenclatura” position were worth much more. It was just feudal style distribution of wealth between rulers, theocrats (aka Party officials), repressive apparatus and peasants.

      Please remember that peasants has no right to change their location (due to system of internal registration/visas called “propiska”), take a foreign trip, select a doctor, buy a car (the price of the car was equal approximately five-ten annual incomes of an average worker). Even basic necessities were difficult to get. Sometime even food was a problem for the peasants. For young women the choice was often stark: food or dress, or food vs. nice shoes (the price of good shoes was equal approximately to one third of a month salary of average female office employee)

      State slaves in Gulags generally were deprived of anything (and they were state slaves, not only prisoners like many in the West assume — the idea was not olny to get rid of any hint of the opposition to the regime but also to create the work army for working in harch conditions of Siberia and Arctic cicle)

      I would like to remind the definition of Gini coefficient from Wikipedia:

      The Gini coefficient is usually defined mathematically based on the Lorenz curve, which plots the proportion of the total income of the population (y axis) that is cumulatively earned by the bottom x% of the population (see diagram). The line at 45 degrees thus represents perfect equality of incomes. The Gini coefficient can then be thought of as the ratio of the area that lies between the line of equality and the Lorenz curve (marked ‘A’ in the diagram) over the total area under the line of equality (marked ‘A’ and ‘B’ in the diagram); i.e., G=A/(A+B).

      From this definition it is clear the feudal and slave societies have Gini coefficient close to one.

  5. deeringothamnus

    I remember when we were the most equal society on earth, and beg to differ that the current inequality is anything but an insidious evil and a cancer on the system. IMO, such society will eschew investment in genuinely useful things like cleaner ways to make energy, more environmentally efficient products, and things that generate actual wealth, in favor of useless luxuries, internet ,real estate bubbles, and other mal investments and misallocations of capital.

  6. Progressive Ed

    What if we factor out the tens of million of illegals that have invaded the Republic? Don’t the illegals impact the lower end of the Gini? And yes, the Gini Coefficient taken by itself is most often used by the Left to beat up the countries based on the free enterprise economic system.

    1. Paul Tioxon

      Nobody is invading our Republic, they are just using the original intent of the founding fathers of Mexico’s original national boundaries. Don’t you tread on the reconquista. Viva Zapata!

    2. skippy

      1. What if we factor out the tens of million of illegals that have invaded the Republic?

      Invasion or historical wage arb…eh…look it up.

      2. Don’t the illegals impact the lower end of the Gini?

      Ha ha! try factoring in the disparity top 10% + .010/01% vs. the invasion.

      3. And yes, the Gini Coefficient taken by itself is most often used by the Left to beat up the countries based on the free enterprise economic system.

      Left, right, sideways, it always ends up at the feet of the masters, the fiat (let it be done) priests, you bark up one tree, when in a forest of antagonists. Don’t you know that when orienteering in the woods one must always alternate right / left movements whence an azimuth is plotted, hell you’ll end up in ideological swamp the way you go about things.

  7. 60sradical

    That brave young man in Tunisia, in a state of utter despair, has changed the world forever! WE ARE ALL EGYPTIANS NOW!!!!

  8. DumpTheBankInfoWiki

    Tomorrow, I will put on my orange jumpsuit with Banks names printed all over it, take my sign that says, “Whose Home Will You Steal Today” and I will plant myself at the most visible JPMorgan/Chase branch.

    Who will join me?

    1. Paul Repstock

      A reasonable idea..But, if you want company you had better advertise your party at least a week in advance. Also, you should recruit freinds in other areas to sort of ‘franchise’ the concept. It would be selfish to not share the joy with people in other cities and states.

      1. DumpTheBankInfoWiki

        I am joining our Egyptian brothers and standing against inequality.

        Decide to make an action and DO IT.

    2. skippy

      Might I suggest some intimate under garments (zipper pulled suggestively low), 8 ball of coke, bag of condoms and a sign that says *free loving* if brought inside the compound.

      Skippy …hope your fit.

  9. Itay

    “Gini Coefficients are like golf – the lower the score, the better (i.e. the more equality).” – That’s half the truth. A gini coefficient of zero means total equality, or communism, where nobody has any incentive to do a good job or to invent something, other than the occassional altruistic jolt.

    A good Gini coefficient is low, but too low is as equally as bad.

    -Me.

    1. Lidia

      That is nonsense. You think that the only reason people do anything is because of money? Only if the society is intentionally mal-formed to work that way.

      Speaking as a woman, I can work all the damn day and not get one red cent. Cooking, cleaning, taking care of kids, gardening, chauffeuring, changing mom and dad’s diapers… MOST work done in the US is not at all reflected in the GNP or any other stats.

      To say nothing of all the things people do for fun: look at how many pretty decent videos there are on YouTube, look at the people who have had all kinds of hobbies from music to building/engineering projects, sewing, amateur theatre, the list is endless.

        1. Lidia

          And don’t forget all the volunteers! The parents at the schools, the oldsters at the public library, the folks at the soup kitchens… to say nothing of the larger, more organized, groups like the Red Cross or whatever.

          The majority of work performed in the US is unpaid.

          Put that in your pipe and smoke it.

    2. Toby

      Actually there is more invention per person in more equal countries. See “The Spirit Level” by Wilkinson and Pickett for the data. They have actually studied this, have looked at the actual data, decades of it, and it does not support the idea you just voiced (or typed).

  10. Kelly Ohler

    “Cheap immigrant labor goes back as far as Carter or Reagan?” Aaahhh…to be so young to think the world began with your birth.
    “I remember when we were the most equal society on earth.” Really?
    What science fiction novels have you been tripping on? Would that be during the slavery periods before, during, or after the American Revolution to the Civil War?
    During the Depression? The 60s? The past 30 years have not been “equal” for the poor, black, Native American, women. You must have been a white Yippie flaunting derugualtion under Reagan?

  11. F. Beard

    We should not worry about wealth inequality as long as the money is made ethically.

    But the money is not made ethically. What we have are government backed counterfeiting cartels using government enforced monopoly money supplies.

    1. Lidia

      There is no such thing as “making” money.

      And there is doubly no such thing as making money ethically.

    2. paper mac

      I believed everything I read on zero hedge I might have these kinds of ideas too. There’s actually a reason why the Gini coefficient exists. It’s an incredibly useful measure of all kinds of outcomes in developed societies, particularly the things that anarcho-capitalists pretend to care about- life (more equal societies have lower overall morbidity and mortality), liberty (more equal societies are more free by virtually any measure), and the pursuit of happiness (more equal societies are happier). Saying “inequality doesn’t matter” is about as dumb as it gets, if you actually care about the quality of life that citizens of a nation are able to lead.

      1. Felipe

        “There is no such thing as “making” money.

        And there is doubly no such thing as making money ethically.”

        Wow, just wow.

        “It’s an incredibly useful measure of all kinds of outcomes in developed societies, particularly the things that anarcho-capitalists pretend to care about- life (more equal societies have lower overall morbidity and mortality), liberty (more equal societies are more free by virtually any measure), and the pursuit of happiness (more equal societies are happier). Saying “inequality doesn’t matter” is about as dumb as it gets, if you actually care about the quality of life that citizens of a nation are able to lead.”

        No, first you should stop inventing statistic about “happier” and “more free” countries, second a more “equal” society, through state manipulation and regulation, usually means a more sheep-mentality society nothing more.

  12. Frank Lynch

    I don’t understand; there must be something wrong between how we’re supposed to feel about Gini scores (like golf, lower is better, greater equality), and the countries we’re compared to.

    US: score 40; ranked 62nd “most unequal.”
    Yemen: score 37.7; ranked 76th most unequal.
    Egypt: score around 34.4; ranked 90th most unequal.

    What’s been flipped here, the score, the rank, or the concept of what’s better?

    1. kievite

      From Wikipedia:

      The Gini coefficient can range from 0 to 1; it is sometimes multiplied by 100 to range between 0 and 100. A low Gini coefficient indicates a more equal distribution, with 0 corresponding to complete equality, while higher Gini coefficients indicate more unequal distribution, with 1 corresponding to complete inequality.

  13. rps

    Unless you’re a descendant of Native Americans, you are the progeny of immigrants. Without immigration legal/illegal the USA would be a bountiful wilderness. US population has increased due to immigrants and their offspring. Otherwise we’d be Europe; more wheelchairs and walkers than strollers. Without immigration, we’d be following the Japanese model, a homogeneous population largely comprised of elderly. China will patiently await Japan’s own demise. Replace the word immigrants with human beings and you stop speaking in tribalistic terms. What makes the USA a unique country is our heterogeneous pool of humanity which challenges the boundaries of tribalism.

    As Dan said, “It is not the real immigrants that are the issue. It is the virtual immigrants by shipping jobs overseas in pursuit of profits” that’s the problem

    1. concerned

      when you make it impossible to make a profit in the US. companies leave and go to where, business is valued and it gives work to its citizens. not hard to understand. why should americans get paid, way more, just because they live in the USA?? they do not out produce. they have something coming to them ??
      Minumn wage is one reason, workmans comp insurance. Health insurance
      attorneys suing companies. sick days, holiday pay . paid birthdays, etc etc etc.
      pensions for public employees. the list goes on and on.
      when there are no jobs then what.
      you cant build, many things in the US anymore. where are all your electronics made ? clothing, alot of cars, now starting planes. even solar cells, and wind turbines. all made other places, because its cheaper and you wont get sued by your employees.

      1. rps

        “Separate an individual from society, and give him an island or a continent to possess, and he cannot acquire personal property. He cannot be rich. So inseparably are the means connected with the end, in all cases, that where the former do not exist the latter cannot be obtained. All accumulation, therefore, of personal property, beyond what a man’s own hands produce, is derived to him by living in society; and he owes on every principle of justice, of gratitude, and of civilization, a part of that accumulation back again to society from whence the whole came.” Agrarian Justice Essay, T. Paine

        Shortened version, “Personal property is the effect of society. The least they can do is support the cause.”

          1. blahbity blahh

            “Society benefited aswell from that acumulation of property so the individual ows society nothing.”

            –I think you may have missed the point of that quote.

            “and he owes on every principle of justice, of gratitude, and of civilization, a part of that accumulation back again to society from whence the whole came”

            –This part of the quote, and it’s reasoning is based off of each individuals “principles of justice, of gratitude, and of civilization”, meaning, because it’s a “circle of life”, so to speak, we should look out for each other, and upholding the cycle of circulation of that accumulation…back into society.

            Principle Justice, gratitude, and civilization are all-encompassing words, that take into consideration, all members of society, not just yourself. To say you owe nothing to society just goes against the mentioned principles.

  14. Ram

    Fact is inequality as on date may be higher in the US than in Egypt and other countries in the news today.

    But there may be another reason why Americans feel there is less of it in the US of A.

    This has to do with the belief that, whatever a person’s current status he/she believes that in the US they always have the OPPORTUNITY to become another Bill Gates (for example).

    Their counterpart in these other countries know FOR SURE that they do not have the faintest chance of rising above their level of poverty and need.

    Perhaps it is this belief (true or otherwise) that gives rise to HOPE, which leads to the American’s complacency. And the very opposite (lack of belief) that results in DESPAIR that leads to a revolution!!!

    Perhaps?

    cheers

    1. jangchub

      America’s poor are royalty compared to Egypt’s poor. For the most part, our entire country is not enmeshed in squalor and poverty and thus there is less incentive to riot here. Right now, anyway.

  15. Ray L Phenicie

    This is very good information and Washington’s Blog is always well informed.

    However, I would like to put out an idea for the future of blogging. I would like to see a change in the style or reporting. I would like to see ideas discussed about how to change the situation, so each time some criticism is brought up, I would like see some ideas on what to do to make the society better.

    Facts are indeed needed, but there is now arrived a time when we must stop with the mere reporting of corruption and evil and present ideas and plans of actions on how we will change the situation. If we do not plan and act for change to build a more just and equitable system based on laws and democratic action, unless starting at this very moment we act for change, we may as well shut down our blogging efforts and retire to a grass shack by the southern beaches.

  16. rps

    The question is has USA social policies progressed since its’ inception? Absolutely. Each generation stands upon the shoulders of its’ predecessors. The past 115 years from 1896 to 2011 has been a revolution in societal evolution. The momentum is breathtaking when measured in this time-frame. We come up against the “power structure” in every generation and yet manage to move forward.

    Here’s an excerpt from the Populist Party platform, issued at its convention in Omaha in 1892, which read in part:

    “The conditions which surround us best justify our cooperation: we meet in the midst of a nation brought to the verge of moral, political, and material ruin. Corruption dominates the ballot-box, the legislatures, the Congress, and touches even the ermine of the bench. The people are demoralized; most of the States have been compelled to isolate the voters at the polling-places to prevent universal intimidation or bribery. The newspapers are largely subsidized or muzzled; public opinion silenced; business prostrated; our homes covered with mortgages; labor impoverished; and the land concentrating in the hands of the capitalists. The urban workmen are denied the right of organization for self-protection; imported pauperized labor beats down their wages; a hireling standing army, unrecognized by our laws, is established to shoot them down, and they are rapidly degenerating into European conditions. The fruits of the toil of millions are boldly stolen to build up colossal fortunes for a few, unprecedented in the history of mankind; and the possessors of these, in turn, despise the republic and endanger liberty. From the same prolific womb of governmental injustice we breed the two great classes—tramps and millionaires.”

    Theodore Roosevelt’s major contribution to American history was his vigorous performance as a Progressive leader. When he became president, the U.S. was at the dawn of the Progressive Era.

  17. makingthedrop

    The edges of our socio-political-economic system(s) are fraying, if not unravelling. A new theory/system will hopefully emerge from the mess and be put into practice rather than toil/fight in vain over restoriung something that no longer serves humanity and balance/order. The most affluent and powerful (and intellectually smart) are just as enslaved emotionally/psychologically to a way of “being” as the “lower” classes. The reptilian brain resides prominently in human consciousness, and feels nothing towards creating/maintaining notions of and hope for equality if that means they gotta give up hunting, feeding and hording at will. Can’t be king of the jungle forever, but folks are sure wired to feel entitled to be. Life is funny!

  18. blunt

    I’d recommend that you forget about Gini coefficients and try to figure out why Monsanto is written into the Iraqi constitution as 2 of 4 companies that can provide farmers with seed. Yep.

    While you’re at it, also try to figure out why Monsanto has managd to lock sown most of the market in seeds, even recently buying the company that made the terminator seed which stops the natural cycle of growth and seeding that plants have used for millions of years to populate the earth. We now favor a capitalist model of seeding whereby Monsanto owns all the seed.

    Afterwards you can watch the futures markets for commodities soar into the stratosphere and the millions starve for lack of access to nutrition. Not that you don’t see it anyhow in the 20 year effect of genetically engineered proteins combining with sugar chains in processed food and the resultant rises in food allergies, ADHD and the unreal rise (1500%) in autism in the past two decades.

    Somehow I’m deciding that capitalism is just another word for killing one’s own children, and everyone else’s as well. But, prolly just an over-reaction on my part.

  19. Felipe

    Cuba and North Korea have some of the “equal” societies on Earth, they are also the worst place on Earth.

    The idea that inequality itself is bad is absurd, what matters is economic prosperty.

    “The irony here is that the very programs that the Republicans, Fox, Tea Party, and supply-siders rail against are the very programs that are preventing Tunisia or Egyptian-type of uprisings here in the US.

    If the elderly, poor, and unemployed did not have Social Security, unemployment insurance, food stamps, Medicare and Medicaid does anybody really think we would not have had riots in the streets and multi-million person marches on Washington over the past 2 years? 10%+ unemployment and underemployment, especially much higher unemployment for people under 25 years old, and poverty for a third of the population is a recipe for revolution.”

    You are making a comparison between inequality and poverty wich is nonsense.

    Without government regulation the acumulation and investment of capital would allow widespread prosperity, instead of socialism the produces equal misery.

    “You are making a distinction where there is none. Cronyism is built-in by design into Capitalism.You have some who control and many more vassasl or cronies who work for their lords.
    It all has to do with the accumulation of wealth to ever fewer people. This also is inherent to Capitalism.”

    You simply dont undertand how a free market works or how wealth is created trough mutually beneficial and voluntary exchanges.

    Capitalism under political manipulation can not thrive and indeed is NOT capitalism at all but mercantilism.

    1. skippy

      Capitalism (industrialism today) is killing the planet bit by bit, it is a marking brand name, those that wield it change its design according to their desire, not to the benefit of others (voluntary my ass). BTW monies and power come before Government, over come it, gag the commons (btw hard to have a voice when your education is purposely hamstrung). This holds true for all ism’s.

      Skippy…profit is an extraction of future potential to satisfy the marketing injected desires, in the now and by a very small few, that claim to speak for the many.

      1. skippy

        Just a side note, we are Post Industrial in the developed world, hence the need for all the derivative finalization aka the extrapolation of an already spaghetti-zed fiat based mode of exchange, all in effort retain command and control of this planet.

        Skippy…just remember the monarchs of old and too this day, trace their lineage to Jesus and their fore god as their right to rule…not much has changed…eh.

    2. Sufferin' Succotash

      I guess no amount of evidence no matter how mountainous can convince some people that capitalism always morphs into some form of mercantilism unless constrained by government regulation. And “government” means a state not dominated by the interests it’s supposed to regulate.

      1. skippy

        Well said sir, if our government is an exercise in rubbish in…rubbish out assembly line process and the raw in[greed]ients are of questionable origin

        (*white collar* drug dealers/marketers sitting around a table offering hoards of cash to each other, seeing which one will commit questionable sexual acts on the provider, just to *feel the game*, find the market price!).

        The peoples of this world will lament.

        Skippy…money and drugs always corrupt.

      2. nomad

        Not that I completely disagree with the statement that some government regulation is not needed but it must be understood that with all pieces of regulation there is the unknown unintended consequence that is never foreseen and that I would argue in many times creates more problems than the initial regulation was intended to solve. Capitalism is not a perfect system but I would argue it is the best system, regardless of the numbers here that continually deride it, but the proof to me is that we still have so many that want to take part in it. The initial premise of why we don’t have riots here from the inequality in America is that even with the situation as it is we still have people that continue try and take part in it through immigration, legal or not. The continual obsession in the inequality of the Possessions one HAS misses that point of what this country and its capitalism were about. It is usually this frame of mind that ends up creating regulations that don’t serve the purpose it need to and creates other inequalities or at least not solving the inequality. It would be better spent focusing on the opportunities one has and whether those are equal. I’m sure I will here all say that that to is unequal and I would likely agree, but the premise is to have that as the frame of mind when creating regulation rather than equal wealth and its distribution. The disservice here is that many have been indoctrinated to think they have a right to an others wealth to share in the sake of equality and that all us evil capitalists owe them that since it was gotten through some underhanded way. Then when that reality is not realized, because it never can be, the unrest will ensue.

  20. A Real Black Person

    Wealth is only created by farming, increased consumption of energy or natural resources or some combination of all three . So far, I don’t think there’s a secotor that ‘creates’ real wealth out of thin air. I hope you don’t think stocks, bonds and financial products are sources are forms of real wealth.

    “You simply dont undertand how a free market works or how wealth is created trough mutually beneficial and voluntary exchanges. ” You simply don’t understand that capitalism revolves around investors. Exchanges are never mutually beneficial or else there would be no profit margin. One side of the exchange is usually more beneficial than the other. In other words, something is made artificially cheap or artifically expensive. The exchanges are rarely voluntary because people are required to work or sell something to get what they need to survive. No one has the option of not participating in a capitalist economy.

    “You are making a comparison between inequality and poverty wich is nonsense.”
    Inequality creates poverty. Human beings aren’t interchangable and not everyone is compensated at the same rate. The competition inherent in capitalism brings out differences in aptitudes and resources among people.

    “Without government regulation the acumulation and investment of capital would allow widespread prosperity, instead of socialism the produces equal misery”

    Capitalism was not meant to create widespread prosperity. It was designed to create the maximum amount of return to investors. The investors are rewarded first and the most for OWNING assets. Investors aren’t rewarded for innovating, they are rewarded for lending to innovators. The investors have an incentive to devalue or pay labor less than what labor is worth because it allows them to keep more money. When investors keep a greater share of the total wealth generated within an economy over time, then that economy is getting more efficient. Widespread prosperity create inefficencies because investors own less of the total wealth generated. The evolution I’ve seen in industrial capitalism is that it begins with real wealth creation. When real wealth creation stops happening, and offshoring begins, capitalism tries to create wealth by expanding debt in a consumer/(financial) services economy.

    In our economy, it seems that the most important actors are the rent seekers, not the engineers or technicians.

    1. rootless

      Material wealth, in addition to the one that is already provided by Nature, is created by any abstract human labor applied in combination with any means of production. I don’t see why this is supposed to be restricted to farming, mining, or energy use.

  21. rootless

    M wrote:

    “But, we still do have an undocumented workers problem here. They are literally trucked in to act as dish washers and kitchen aids in some of the local food joints.”

    So give illegalized workers legal papers. I guess that most illegalized immigrants would take those gratefully. I doubt many prefer to be in the status, in which they are currently. Problem solved.

    Of course, the problem with inequality in the capitalist world economy wouldn’t be solved. It’s not rooted in immigration.

  22. Bible Man

    In the Bible, Jesus only used physical violence (whipping) against one class of people – money changers.

    You can be pro Jesus or pro Banker but you can’t be both.

  23. Brett

    I’m on the other side of the world (Australia), a country very similar to yours in almost every way, except we have very low numbers of homeless and working poor, and we did very well on the above graph.
    The major differences, IMHO, are:
    1) When the Great Depression hit, the US government passed the buck brilliantly by brainwashing its people into thinking that if they couldn’t take care of themselves and feed their family it was their fault and they deserved what they got. And that idea stuck, to this day.
    2) Post World War 2 and throughout the cold war, the US government were so scared of communism becoming popular that they demonised it to the point that if you believed in equality, looking after the less fortunate, fairness and justice for all, you were some kind of Godless commie. And that idea stuck, to this day.
    3) The American Dream has been twisted and bastardised by the powers that be to now mean “acquire as much as you possibly can, no matter what depths you have to sink to, or how many people you have to step over.
    4) Everything has to be profitable, and privatised, even prisons and healthcare. Large corporations run your prisons, which, with the help of aggressive lobbying and corruption, have become massive slave labour sweatshops that make billions for their owners, and to keep expanding, more and more draconian laws and sentences have to be enacted. America imprisons more of its own citizens than any other country in the world, by a mile, including Iran and China. And as for healthcare, in Australia, and most countries similar to the US, if we get sick or have an accident, we go to a hospital or doctor and it’s either free, or we pay a very small amount, most of which will be refunded to us by the government. The sky hasn’t fallen in, communism hasn’t taken over etc. It’s not a problem at all, to anyone.
    5)Pretty much no-one has a gun. Why would you? We have almost zero gun deaths here. And again, the sky hasn’t fallen in.
    The US has been sold a lot of lies over the last hundred years or so which comparable countries have not. And looking at you from a distance, most of us are concerned and frightened for your future.
    We wish you well.

Comments are closed.