Recently I’ve been seeing many facebook posts about a video describing the very lopsided distribution of wealth and income in the United States. The video is actually a year old but it has been given a new lease on life by upworthy and, at the time of this post, has more than 10,000,000 views.
The basic arguments of the video are:
- The US has very unequal distribution of wealth and income.
- Over time, wealth and income distribution are becoming more unequal.
- Most Americans aren’t aware of how unequal and increasingly unequal wealth and income are in the US, and they would prefer them to be more equitably distributed.
This has made for some good and spirited discussion among my friends. Many of my socialist-leaning European friends believe that it’s a great travesty and that Americans are either ignorant about it happening or wrong in willfully letting it happen. Many of my libertarian-leaning American friends believe that it’s a right and natural outcome of a meritocratic free market.
Regardless of the video and the data sources and the definitions it uses, I’m glad it has stimulated this discussion because it’s not something I’ve really thought much about before. It leaves me with several questions:
- Is US wealth and income distribution as inequitable as the video makes it seem
- How does the US compare with other countries? (The US looks OK in this World Bank data.)
- What should the US wealth and income distribution look like – and why?
- Is this even the right question? I’ve seen it argued that wealth and income mobility (the ability for someone in one group to move up to another group) is more important than a snaptshot or trend of distribution. This resonates with me as it seems to align with the American dream: that anyone, no matter where he comes from or what he has today, can make it big tomorrow.
- If mobility is the right metric to focus on, how does the US stack up there? (Not too well, it would seem from this Wikipedia article.)
- Or are there other metrics we should look at for an ideal future state and work backward from there?
- If indeed the US is out of whack with regard to the metrics we claim to hold dear, why is that so? And what can or should be done about it? What other approaches exist and what would be their tradeoffs?
What do you think about these issues? I don’t have any conclusions of my own yet as I’m just starting to consider them.