How economic inequality harms societies
Today I had the opportunity of watching a TED talk entitled “How Economic Inequality Harms Societies”. This talk, by Richard Wilkinson, explained how countries with higher economic inequalities do worse in terms of health and social problems. This inequality is not just from GDP per capita, but how much of a difference there is between the “very poor” and “very rich”. As a result of this inequality, the country is likely to have less social mobility as well as greater percentage of their population with mental illness.
The important point to note here is that this inequality can be reduced. In countries like Sweden and Japan, two vastly different countries, they both are able to reduce the inequality in their population. In Japan, the income gap is much less to begin with, so taxes do not need to be as much of an issue. On the contrary, Sweden has a much greater income difference, so there are higher taxes on the people with bigger incomes to help balance and reduce the divide.
While watching this talk, I noticed that the United States as a whole did quite poorly on many of the charts pictured, due to its large gap in wealth/income among the population. Recently, there has been much debate over whether or not to give a tax increase on the rich. Conservatives view that if the rich get to keep their money, then they will put it back into the economy because they are inherently good and want the economy to grow. Liberals have a completely opposite approach - since the rich earn more, they should be required to give more of it back to the government, so that the government is able to spend it on vital services such as maintaining our nation’s infrastructure and healthcare for seniors.
On January 1st, if Congress does not find a way to solve the Grand Canyon-sized fiscal cliff, then it would have an unfathomable impact on our nation’s economy and government. While this is an extremely difficult problem to solve, our leaders are able to lessen the blow by having the wealthy spare some of their assets for the common good. This will not entirely fix the problem, as there is obviously no catch-all solution. However, it is a step in the right direction. If the rich contribute more back, we can move one step closer to bridging the gap of economic inequality.
If Americans want to live the “American” dream, they should move to Denmark.
And that’s what I’m thinking about today.