The Gini Coefficient is a measure of income inequality across a society. The higher the number, the greater the inequality. According to the CIA, the United States has a higher gini coefficient, hence higher inequality, than the following countries: Iran, India, Cameroon, Ivory Coast, Jordan, Ghana, and many, many more.
The middle class is the engine of democracy and real economic growth. When our gini coefficient is higher than several countries in sub-Saharan Africa, you know that we have a problem. It is higher than at any point since the coefficient has been recorded. This raises some questions. One, is our tax structure efficient? Two, what is GDP/capita if you don't include the top 10% of income earners? Three, why is the gini coefficient rising when US worker productivity has risen so sharply with the advent of modern communications? The answer to number three is obvious, but the other two will require more thought.
In 1950, the ratio of the average executive’s paycheck to the average worker’s paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.
ReplyDeleteApproximately 40% of all retail spending currently comes from the 20% of American households that have the highest incomes.
According to economists Thomas Piketty and Emmanuel Saez, two-thirds of income increases in the U.S. between 2002 and 2007 went to the wealthiest 1% of all Americans.
The bottom 40 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.