what is “income inequality?”

according to its own website, it is t̶h̶e̶ ̶g̶o̶s̶p̶e̶l̶ ̶o̶f̶ ̶b̶e̶r̶n̶i̶e̶ “the extent to which income is distributed in an uneven manner among a population.” it’s one of today’s most powerful phrases in politics. its existence cannot be denied since human prosperity is and has always been unequal. a politician will always “fight” income inequality, for the same reasons he will always “fight” poverty.

but income inequality (ii henceforth) isn’t poverty. it’s a statement of empirical fact like “height inequality.” with that said, one in four democratic primary voters believe that ii is the top problem facing the country. i believe there is a misunderstanding. an overwhelming majority of americans would agree that there should be market prices for things, including labor. we celebrate economic mobility and one’s agency to increase earning power with skills and education. if the state could introduce a mechanism to actually make income more equal, i highly doubt it will be popular.

there’s significant subjectivity behind how the issue of ii is framed. for example, when someone refers to “household income” over a period of time, it helps to know that households have gotten significantly smaller over time and that per capita income show different results.

ii has been used as a quantifiable symbol for inequality in social status, political power and even human dignity. this is not a nihilistic argument as those things are very important. however, far too many facts are omitted or overlooked when discussing ii as a barometer for variations in well being:

age

what factor best correlates with wealth in america? having light skin? being born with a penis? nope, being old. which may be the biggest duh of this post. in the modern economy, the advantages of youth (physical health and strength) are diminished. there is a higher premium on experience and skills that accumulate with age. therefore, when people talk about individuals at the top and bottom of the income distribution, they are often talking about similar workers at different stages of their lives.

ii versus reality

first and foremost, 21.3% of the united states receives government assistance, none of which counts as gross income.

the common narrative that accompanies ii: ii has been on the rise. as corporations post record profits and executives stack more zeros, ordinary people have not “gotten a raise” in years.

while that analysis may be quantitatively accurate, it completely omits the issue of quality. examples include amazing advances in medicine and a subsequent large increase in life expectancy (in case that matters to living organisms). equally impressive advances in other technology have enhanced our working conditions. perhaps most importantly, our access to information and ability to communicate is mind-boggling. would you forever give up your smartphone and your air conditioning for more fiat currency?

last but not least, the reality is that even low income americans live luxuriously in g̶l̶o̶b̶a̶l̶ human terms. this is strictly a post about the american economy. however, it’s healthy to be reminded from time to time that most people are poor as hell.

the money ≠ the power

• chinese-americans and japanese-americans have had higher income than whites for decades. with that said, the groups are underrepresented and in the political shadows of america. (not-so) fun fact: despite being one of the wealthiest cohorts at the time, japanese-americans faced internment during WWII.
• cultural prejudice against americans of arabic and islamic backgrounds persists, yet their income levels remain comfortably above average.
• when irish-americans wielded heavy political influence during the 1930s, they remained in economic poverty.
• individuals of similar ethinc backgrounds have wide disparities in income, which undermine the efforts of programs that target individuals based on ethnic background.

in today’s era of hash tags, acronyms and buzzwords it’s tempting to paint with broad brushes and partake in the buzz. we can’t ever underestimate the power of mere words.