Friday, July 28, 2006

Inequality on the rise

Echidne has an excellent discussion of the rise of inequality in the USA over the last half century, and why the difference in wealth is just as important as absolute levels of wealth.

Echidne doesn't discuss the myth of American social mobility, but she has a great, easy to understand explanation of the Lorenz curve and the Gini coefficient. When you combine increasing inequality with low upward mobility, together with a middle class being squeezed out of existence, the signs are not good for peace and prosperity in the USA. The USA has levels of class and income inequality approaching those of Third World banana republics, and increasing rapidly.

Of course, the American entertainment industry rarely shows the middle-class under seige: you'll see Mr and Ms Middle Manager enjoying restaurants, movies, shopping and all the advantages of middle-class life, but you don't see the six or eight credit cards it takes to keep their heads above water. (According to this report, the average American household has 19 pieces of plastic in their wallet, including eight bank cards.) Nor do you see the constant gut-wrenching fear of retrenchment that forces Americans to work harder, but less productively, every year.

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