INEQUALITY has always been part of the American economy, but the gap between the rich and the poor has recently been widening at an alarming rate. Today, more than 40 percent of total income is going to the wealthiest 10 percent, their biggest share of the nation's pie in at least 65 years. The social and political repercussions of this disparity have been widely debated, but what about the effects on the economy?
Oddly, despite its position in the political debate, the question has received little attention from economists...
Perhaps because the effects of inequality have been understood for quite some time?
Sir Michael Marmot, a professor of epidemiology and public health at University College London and director of its International Institute for Society and Health, has spent most of his career studying the link between inequality and health around the world. In a much-publicized paper published in May in The Journal of the American Medical Association, Sir Michael and three colleagues studied health in the United States and in Britain. They found that at various points throughout the social hierarchy, there was more illness in the United States than in Britain.
Sir Michael theorizes that a reason for the disparity was the greater inequalities in the United States and heavier stresses resulting from them.
Yeah, yeah we knew that.