JBHE: Latest News for 5/14/09

Why Inequality Is Bad for Whites as Well as Blacks

During the Reagan and Bush years, greed was glorified as a potent force in stimulating economic growth. Extravagance and overindulgence were the order of the day. The issue of income inequality was not a major concern. In fact it was encouraged. The open showcase of great wealth was seen as providing an incentive for others to work hard so they too could enjoy “the good life.”

But an important and perhaps revolutionary new book effectively shoots down the theory that income inequality is an effective tool for improving society. In The Spirit Level authors Richard Wilkinson and Kate Pickett present compelling evidence that the overall well-being of a society is determined not by wealth alone but, rather, through equitable distribution of wealth.

In a mammoth research effort the authors examined a wide range of social factors in 20 of the world’s wealthiest nations and compared these indices against the level of income inequality in these countries. They also conducted similar analyses for the 50 states in America. The results showed that in states and countries where there were the largest gaps in income, there were likely to be higher rates of crime, drug and alcohol abuse, obesity, homicide, and teenage pregnancy. Children’s educational performance and life expectancy were lower in the states and countries that had a high level of income inequality.

The study shows that Japan and Scandinavian countries have the lowest levels of income inequality but rank high on most social indicators. Britain, the United States, and Portugal ranked high in income inequality but fared the worst on social indicators such as crime and drug abuse.

These conclusions may not come as much of a surprise. It is obvious that countries with more poor people are likely to have higher rates of crime, drug abuse, and poor health. But the most revealing finding of the Wilkinson and Pickett study is that even the well-off people in countries with high levels of income inequality do not fare as well on social indicators as well-off people in countries where there is a low level of income inequality. For example, the authors note that in countries with high levels of income inequality, mental illness rates can be five times as great at all socioeconomic levels, compared to mental illness rates in nations where there is little income inequality. Also, life expectancy for people in upper-level socioeconomic groups is higher in countries where there is less income inequality. The authors conclude, “The effects of inequality are not confined just to the least well-off; instead they affect the vast majority of the population.”

The authors speculate that societal stress plays a role. Societies with greater inequality are more stressful than egalitarian societies. Stress causes anxiety, depression, and can have a significant impact on one’s health. People exposed to significant stress are more likely to die earlier, abuse drugs, or commit suicide. Even wealthy people in unequal societies become more stressed because of political turmoil, higher crime rates, and the greater spread of disease.

The Spirit Level is a highly controversial and even subversive book. This important work deserves widespread attention and should provoke a much needed debate on the damage on society from economic inequalities.