February 6th, 2011
Archive for February 6th, 2011
One of the motivating factors behind the Egyptian rebellion which has riveted the world’s attention is the rank inequality in that country. Think Progress point out that inequality in the US is, in fact, much worse than in Egypt:
As Yasser El-Shimy, former diplomatic attaché at the Egyptian Ministry of Foreign Affairs, wrote in Foreign Policy, “income inequality has reached levels not before seenin Egypt’s modern history.” But Egypt still bests quite a few countries when it comes to income inequality, including the United States:
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.
– 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.
The Gini coefficient is used to measure inequality: the lower a country’s score, the more equal it is. Obviously, there are many things about the U.S. economy that make it far preferable to that in Egypt, including lower poverty rates, higher incomes, significantly better infrastructure, and a much higher standard of living overall. But income inequality in the U.S. is the worst it has been since the 1920′s, which is a real problem.
Currently, the top one percent of households make nearly 25 percent of the total income in the country, after they made less than 10 percent in the 1970′s. Between 1980 and 2005, “more than 80 percent of total increase in Americans’ income went to the top 1 percent.”
According to the latest data, “the gaps in after-tax income between the richest 1 percent of Americans and the middle and poorest fifths of the country more than tripled between 1979 and 2007.” And there’s even a stark divide within that one percent. “The share of the nation’s income flowing to the top one-tenth of 1 percent of households increased from 7.3 percent of the total income in the nation in 2002 to 12.3 percent in 2007,” the Center on Budget and Policy Priorities noted.
Yale economist Robert Shiller has said that income inequality “is potentially the big problem, which is bigger than this whole financial crisis.” “If these trends that we’ve seen for 30 years now in inequality continue for another 30 years…it’s going to create resentment and hostility,” he said. But tax and spending policies that provide adequate services and allow for economic mobility — along with a robust social safety net — can head off trouble that may come down the road.
February 6th, 2011