Lifestyle

The Rich Get Richer: Is Economic Inequality Hurting Us All?

When you live in a city like New York, it’s very easy to see the huge income gap between the very rich and the very poor. It’s a place where people who are hungry for success come to chase their dream of being a part of the elite 1% — and also where many are barely scraping by because of the heavy financial demands of living here. It’s interesting that people who don’t live in NYC often say that New Yorkers are egotistical, rude and unwelcoming – especially after looking closer into the real effects of economic inequality on us all.

Income inequality in the United States today has reached levels that haven’t been seen since the roaring ’20s. Over the last three decades, the top 1% of incomes have risen by 279%, while the bottom fifth of workers have seen an increase of less than 20%. Some hedge fund mangers made $4 billion annually, enough to pay the salaries of every public school teacher in New York City according to Paul Buchheit of DePaul University. Today the average CEO’s pay is more than 250 times the average worker’s, whereas in 1965, it was only 25 times.

This continues as the rich only get richer since they obviously have a higher propensity to save as compared to someone who lives paycheck to paycheck, and this saving is then turned into investment (making them even more money). While other nations like Sweden have similar economic growth among it’s people, they close the income gap with redistribution of wealth through taxation and benefits, and when you compare the overall health of their citizens to those of the U.S. it’s pretty interesting to see the correlation:

economic inequality

So why should we care? Because the the rising income equality doesn’t just effect the poor – it effects us all. In Kate E. Pickett and Richard G. Wilkinson’s research on the topic, they found that, “severe inequality undermines social bonds and dashes the health of millions. It contributes to mental illness. It increases obesity and teenage pregnancy. It fosters crime. It lowers life expectancy. These ills don’t affect just the poor. They affect everybody.” Since widening inequality enhances feelings of dominance in the rich and submission in the poor, we end up experiencing increased social distance and in turn, crazy high stress levels. We would assume that the lowest income citizens would be at grater health risk, but the study actually concluded that income inequality is “detrimental to the more affluent members of society, since these citizens experience psychosocial stress from the inequality and loss of social cohesion.”

Where there is more equality we use more cooperative social strategies, but inequality results in people feeling they have to fend for themselves and competition for status becomes increasingly more important. The competition for status results in status anxiety and humiliation, more worry about how we are seen and judged, and more “social evaluation anxiety” which leads to increased consumerism – and we all know that doesn’t increase happiness or wellbeing. The stress from all of this is actually making us sick. The United States no longer boasts anywhere near the world’s longest life expectancy. It doesn’t even make the top 40.

In this and many other ways, the richest nation on earth is not the healthiest.

income gap

 

I’m not saying I’m a communist here. We should all strive for success, but perhaps we need to reevaluate what success means to us. Is being a part of the 1 percent worth the impact to our society as a whole? Do we want to live in a world where you feel the need to watch your back and not trust others because we are all rivals or in a place where we can depend on cooperation and mutuality? I can only hope that instead of the wealthy using  their power in politics to further benefit their financial gain, that more is done to close the gap and create a happier, healthier society that we can be proud of.

 

 

One Comment

  1. The rich it seems will always get richer as I can see many people with money do not feel they should have to pay for anything. Moreover, many of the poor and middle class workers give goods and services free of charge to people with money, I think with the hope that it will be repaid with interest.

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