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Inequality In America Is Worse Than In Egypt, Tunisia Or Yemen

Courtesy of 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.
  • And Yemen is ranked 76th most unequal, with a Gini Coefficient of 37.7.
  • 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:

norton ariely in press


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  1. You know what else plays into American complacency, Ilene? It’s the whole American dream myth, and these days it seems fed in large part by gambling – casinos and lotteries.


  2. That make sense, like the constant misinformation being presented on TV… 


  3.    "Wealth, when you get right down to it, is not the cause of poverty." -- Mitchell B. Pearlstein, paraphrasing George Gilder
       "Ultimately it is only wealth that can reduce poverty." -- Thomas Sowell
     

      "Never mind the low wages and harsh living conditions of the early years of capitalism.  They were all that the national economies of the time could afford.  Capitalism did not create poverty — it inherited it.  Compared to the centuries of precapitalist starvation, the living conditions of the poor in the early years of capitalism were the first chance the poor had ever had to survive.  As proof — the enormous growth of the European population during the nineteenth century, a growth of over 300 percent, as compared to the previous growth of something like 3 percent per century."-- Ayn Rand

       "Economic growth was non-existent during the centuries 500-1500 — and per capita GDP rose by merely 0.1 percent per year in the centuries 1500-1700. In 1500, the estimated European per capita income was roughly $215; in 1700, roughly $265." -- Andrew Bernstein

    "In a poor country like ours, the alternative to low-paid jobs isn’t well-paid ones; it’s no jobs at all." --  Jesús Reyes-Heroles, Mexico’s Ambassador to the USA

     
    "Wealth is not a fixed quantity and one person’s success does not come at the expense of others … Economists have understood [thatfor over two centuries, but moralists have not caught up."
    "When plunder becomes a way of life for a group of men together in a society, they create for themselves in the course of time, a legal system that authorizes it and a moral code that glorifies it."
     -- Frédéric Bastiat
     
    "Government is the great fiction through which everybody endeavors to live at the expense of everybody else."- Federick Bastiat