[Sixstrings]

This article isn't new, but it's some interesting data. Here in the US we stand alone among developed nations in terms of the sheer gap we have between the rich and everyone else.

So the higher the number, the more wealth inequality there is. For most advanced industrial economies, the Gini number is pretty low. According the the CIA World Factbook (table compiled here), the lowest Gini score in the world is Sweden's, at .23, followed by Denmark and Slovenia at .24. The next 20 countries are all in either Western Europe or the former Communist bloc of Eastern Europe. The EU as a whole is at .307. Russia has the highest number in Europe (.41); Portugal is the highest in Western Europe (.38). Japan is at .381; Australia is .352; Canada is .321.
http://mapscroll.blogspot.com/2009/04/is-us-becoming-third-world-country.html

Wow, we don't even have one state that even approaches Canada in income equality.

Here's the list, which 3rd world nation does your state compare to?

And then there is the United States, sandwiched between Cote d'Ivoire and Uruguay at .450. Not counting Hong Kong (.523), the US is a complete loner among developed countries. In fact, as you can see from the map above, there is no overlap between any single US state and any other developed country; no state is within the normal range of income distribution in the rest of the developed world. Here's a list of the states with their Gini index numbers, and the country where income distribution is most comparable in parentheses:

Alabama - .472 (Nepal)
Alaska - .417 (Cambodia)
Arizona - .454 (Jamaica)
Arkansas - .460 (Ecuador)
California - .466 (Rwanda)
Colorado - .450 (Uruguay)
Connecticut - .480 (Venezuela)
Delaware - .434 (Guyana)
District of Columbia - .537 (Honduras)
Florida - .467 (Rwanda)
Georgia - .461 (Mexico)
Hawaii - .438 (Nigeria)
Idaho - .421 (Thailand)
Illinois - .462 (Malaysia)
Indiana - .432 (Guyana)
Iowa - .424 (Burundi)
Kansas - .441 (Kenya)
Kentucky - .460 (Ecuador)
Louisiana - .475 (Madagascar)
Maine - .428 (Singapore)
Maryland - .433 (Guyana)
Massachusetts - .461 (Mexico)
Michigan - .444 (Philippines)
Minnesota - .430 (Iran)
Mississippi - .471 (Nepal)
Missouri - .449 (Cote d'Ivoire)
Montana - .426 (Singapore)
Nebraska - .430 (Iran)
Nevada - .434 (Turkey)
New Hampshire - .417 (Cambodia)
New Jersey - .458 (Uganda)
New Mexico - .457 (Uganda)
New York - .495 (Costa Rica)
North Carolina - .458 (Uganda)
North Dakota - .434 (Guyana)
Ohio - .449 (Cote d'Ivoire)
Oklahoma - .460 (Ecuador)
Oregon - .444 (Kenya)
Pennsylvania - .455 (Jamaica)
Rhode Island - .442 (Philippines)
South Carolina - .462 (Mexico)
South Dakota - .439 (Nigeria)
Tennessee - .468 (Rwanda)
Texas - .474 (Mozambique)
Utah - .410 (Russia)
Vermont - .420 (Thailand)
Virginia - .456 (Uganda)
Washington - .443 (Kenya)
West Virginia - .447 (Cameroon)
Wisconsin - .424 (Burundi)
Wyoming - .413 (Senegal)

Obviously, the US is far wealthier than any of the countries to which states are being compared on this list; but it's striking to see the US fit a pattern which, outside of the US, is exclusively a phenomenon of the underdeveloped world.
http://mapscroll.blogspot.com/2009/04/is-us-becoming-third-world-country.html

[Ludi]

It's the American Way - "Screw you, Jack, I've got mine" and "Paddle your own canoe."

It also leads to higher rates of illness, crime, violence against women and children, etc.

[VMarcHart]

And I get I kick when our presidents preach to other countries we're a loving, caring, understanding nation.

The US remains a great place if you're rich. It used not that bad if you were poor, but sucking more and more by the day.

[Revi]

The middle class is slipping further and further behind here in the US.

We are about like Guyana here in Maine.

It feels like it too, but a lot colder.

[shortonsense]

The middle class is slipping further and further behind here in the US.

We are about like Guyana here in Maine.

It feels like it too, but a lot colder.

Maine has always struck me as quite a decent state. I started vacationing their back in the mid-80's, was there as recently as 2007. While the lobster shacks on Desert Island didn't seem as plentiful this century as compared to last, certainly Guyana didn't spring to mind upon conversations with the locals, or observation of some of the locations around Bar Harbor.

I prefer it inland, but the wife has always liked the island.

[Revi]

I think that Mount Desert Island is an amazing place. I don't however think it's representative of Maine as a whole. It's got the national park and lots of great things to see and do. Unfortunately most of us can't afford to live there. Thanks to the National Park we do visit there, however. Along with the rest of America we camp out and buy a tee-shirt or two.

Check out the rest of Maine and you'll see that it isn't quite as well off.

We like it, but it isn't anything like Northeast Harbor.

[shortonsense]

Check out the rest of Maine and you'll see that it isn't quite as well off.

Lots of states have those little places where the "less fortunate" congregate. Appalachia being a prime example, Cajun country in Louisiana, the rust belt, remote Texas farming towns, heck even can even argue that the LA Basin isn't quite as well off nowadays as its northern sisters.

Needless to say, many of those places were suffering even before the onset of the most recent peak oil, but thats the way it works sometimes. Being familiar with what happened to my relatives in West Virginia when King Coal collapsed some years ago, much of what appears to be happening in this country appears similar. A readjustment between what has value, what has not, where those things of values are, or are made, or have concentrations of such things ( think, New York for financial services, Miami for tourism and international dealings with southern hemisphere countries, Silcon Valley, Texas for nearly anything, etc etc.).

I am a fan of voting with one's feet obviously, easier said than done for some of course, but I'm a firm believer that many people will never leave their comfort zone, and are therefore limited by their very nature, people in my family being the examples I am thinking of, some high school friends even.

[Pretorian]

It's the American Way - "Screw you, Jack, I've got mine" and "Paddle your own canoe."

It also leads to higher rates of illness, crime, violence against women and children, etc.

any logic behind this statement or its another enlightening of yours

[Novus]

Statement seems logical to me. Europe was hit just as hard by the global recession but you don't see millions living in tent cities over there now do you. Wall Street made huge profits hand over fist this whole recession while the working middle class was decimated.

[Sixstrings]

Statement seems logical to me. Europe was hit just as hard by the global recession but you don't see millions living in tent cities over there now do you. Wall Street made huge profits hand over fist this whole recession while the working middle class was decimated.

Exactly. This is why income disparity matters, this is why we have American kids living in tent cities without proper sanitation. I challenge you to find such a spectacle in Canada or western Europe.

[Revi]

I think that there are a lot of places where the poor are invisible. Here in Maine that's not the case. The rich live right next door to the poor.

In parts of Massachusetts people are segregated into different towns depending on where they are on the economic ladder.

Here we're all right next to eachother. There aren't many people who are at the top of the ladder, but there are lots of lower middle class working people.

I am one of them.

[Outcast_Searcher]

This only tells one side of the story.

First, this is for 2006. Since the recession started, the wealth distribution in the U.S. has shrunk, largely due to 401k's becoming 101k's, for example. So, the trend has turned and will likely stay turned (if things are anywhere near as bad as most on this site claim).

Also, you have to look at the methodology used. As usual, the whiners put this data together, and it doesn't include obvious things, like the extensive income redistribution that the government provides. This quote is from the methodology in the ACS -- the PDF link for the actual census survey data that was used in the article:

"Money
income does not include the value
of noncash benefi ts such as food
stamps; health benefi ts; subsidized
housing; payments by employers
for retirement programs, medical,
and educational expenses; and
goods produced and consumed on
the farm".


So, garbage in, garbage out, and the income redistributors will never be happy until they get to redistribute it ALL, apparently despite who earns it. Of course, reporting income as though government payments are NOT income makes the whiners' case more convincing, even if it's based on a lie.

If you look at real poverty, which is ABSOLUTE poverty, there actually isn't that much of it in first world countries. This looks at what income/assets/services folks actually have. RELATIVE poverty is based on psychologicial factors (boo hoo, X has a bigger house/car/TV than I do, so that makes me feel bad). This per articles from various economists who seem to have figured out that by whining about inequality they can be published.

Sorry, kids, but relative poverty does not generally imply absolute poverty in first world countries, (IF government payments are considered as they certainly should be). There was a very good article on this in Wikipedia, last time I checked. Well balanced, IMO.

A great book that has a lot of data on absolute vs. relative poverty in the U.S. is "Myths of Rich and Poor". Hint - the authors, two economists, point out that even the "poor" have an awful lot of microwave ovens, TV's, cars, air conditioners, etc. etc. etc. compared to in the 70's - showing how actual poverty has greatly decreased in the U.S. They focus on data instead of emotion.

I know that most of this site is about gloom and doom, but most of you folks SEEM to want to try to be self-supporting, i.e. by preparing your doomsteads, finances, etc. So how does this sort of outlook/politics fit into this?

And by the way, I'm not rich; I'm frugal and I believe in property rights.

[frankthetank]

Most American's are still too rich. We still consume way too many resources and that will still need to be fixed That chart will only get worse...

Food, water and shelter... all you need

My wife and I must be pretty good with money, because we make crap yet still are able to live pretty well.

I bet most of use live better then about 5.5 billion+ people!

[Sixstrings]

This only tells one side of the story.

"Money
income does not include the value
of noncash benefi ts such as food
stamps; health benefi ts; subsidized
housing; payments by employers
for retirement programs, medical,
and educational expenses; and
goods produced and consumed on
the farm".

If that's the case, then the comparison remains valid. Remember, the social welfare benefits are much more extensive in Canada and Western Europe. So if this study completely factored those benefits out, then it's even more striking that we're so far behind Canada and Europe.

If you look at real poverty, which is ABSOLUTE poverty, there actually isn't that much of it in first world countries. This looks at what income/assets/services folks actually have. RELATIVE poverty is based on psychologicial factors (boo hoo, X has a bigger house/car/TV than I do, so that makes me feel bad).

Relative poverty is the only measure that matters. Everything is relative. All we really need is food to eat, the rest is ALL psychological. Having a job to do, feeling valued for that work, feeling valued by your society -- these are big factors in human happiness, the feeling of getting a "fair deal" from one's own society. It's possible that a technically impoverished tribesman in the Amazon may in fact feel rich because his society is well balanced and all those relative psycho-social needs are being equitably met.

Obviously, absolute poverty means food deprivation and no shelter from the elements. You could throw in lack of medical care, a condition which is very common in the US (take a look at the people going to these free clinic things put on by MSNBC, thousands show up with chronic conditions that have gone untreated for years). And as for lack of shelter, talk to some of the homeless in your town. I think the only thing you can say about absolute poverty is that people don't starve to death here, but that's only because the better off throw away so much food that can be scavenged.

So I'm not even sure you're right on absolute poverty, but I'll concede that point anyway. Because the most important factor is relative poverty -- in short, whether or not one feels poor. When too many people feel too poor, they become shut out of the "American Dream" and mainstream society. Ludi is right when she talks about poverty fueling domestic violence and child neglect / abuse.

[Novus]

This only tells one side of the story.

First, this is for 2006. Since the recession started, the wealth distribution in the U.S. has shrunk, largely due to 401k's becoming 101k's, for example. So, the trend has turned and will likely stay turned (if things are anywhere near as bad as most on this site claim).

You are only telling one side of the story and that is yours. The big corp CEOs all got billion dollar golden parachutes as their companies went down in flames. AIG bailed out to the tune of $200 billion and the CEO and top managers get multi million dollar bonuses. Same story repeated at Goldman Sachs only they used hyper trading to bet against their own loans defaulting. So while the average American 401k was wiped out the mega rich saw their wealth increase during the recession.

Also, you have to look at the methodology used. As usual, the whiners put this data together, and it doesn't include obvious things, like the extensive income redistribution that the government provides.

American Government practices robin hood in reverse income redistribution. Rob the poor to fatten the already mega rich. On the first day of TARP bailout more money was handed over to billionaire bankers than was spent on the meager welfare state in the 40 years of its existence. Goldman Sachs has record profits today because they unloaded toxic sludge derivatives at mark to make believe prices onto the US tax payer.

So, garbage in, garbage out, and the income redistributors will never be happy until they get to redistribute it ALL, apparently despite who earns it.

The crooks at Goldmen didn't earn their profits. They swindled it from the US Treasury in a shell game of theirs where they exchanged dubious securities for real money at TARP. It is not redistribution to want my money back after being hustled.

If you look at real poverty, which is ABSOLUTE poverty, there actually isn't that much of it in first world countries. This looks at what income/assets/services folks actually have. RELATIVE poverty is based on psychologicial factors (boo hoo, X has a bigger house/car/TV than I do, so that makes me feel bad). This per articles from various economists who seem to have figured out that by whining about inequality they can be published.

People are literally living in tent cities right now while the rich party like vampires at a blood drive. I am not talking about your everyday homeless drug addict but these were good people. Whole families, children, men, women. People who had jobs lived in houses and drove cars. Their fortunes completely reversed now because of the shenanigans on Wall Street.

[Tyler_JC]

This stuff again?

The Gini index is largely junk.

1. The United States does not give out cash to welfare recipients. We give out rent subsidies, food stamps, medical benefits, etc. Those don't get counted as "income" and aren't included in American Gini coefficient calculations. In France and other EU countries, those welfare benefits ARE included as income for the purposes of calculating the Gini coefficient. That has an impact on the scores.

2. With Gini we are basically seeing a huge increase in the wealth of the top 10% and specifically top 1% of American households, not a huge drop in the standard of living of the poor. In the past couple decades, the rich have become richer faster than the poor have become richer. On a relative basis, The poor are "worse off" but on an absolute basis, they are undoubtedly better off.

3. Gini ignores the impacts of immigration. 90% of native born US workers have a high school diploma. Only 71% of foreign born workers have a high school diploma. However, the US also has a large number of very highly educated immigrants. America takes in a disproportionately large number of migrants from the top and bottom of the socio-economic ladder.

The median Mexican immigrant household earned $34,000 in 2006 while the median South/East Asian immigrant household earned $63,000. This is a result of the differing education levels between the two groups and has nothing to do with welfare policies in the US. You surely cannot hold the US responsible for the poor quality of public education in Mexico. But this has an impact on America's equality score.

4. Iceland, Denmark, etc. are tiny, homogeneous countries. The cost of living doesn't vary much within Denmark. Compare the cost of living between San Antonio, Texas and Los Angeles, California. You could earn twice as much money in LA and have the same standard of living as someone in Texas. Gini doesn't take this into account. The metric just sees a huge income gap between LA and San Antonio and calls that "inequality". Obviously this is ludicrous. Cost of living matters, especially when we're talking about a country as huge and as varied as the United States.

Those are just a couple of things that popped into my head. I'm sure I could think of a few more if I researched this some more.

[MarkJ]

Many of our lower income customers, tenants and employees are documented/reported income/savings/asset poor, but live quite well.

Many pay little or zero income taxes, little or zero property taxes, they live with relatives rent free, they receive $X,000 tax refunds/credits, plus many have, currently or will receive years of unemployment extensions.

Cash welfare benefits have been on the decline for years. Modern benefits for the income challenged are in the form of low taxation, tax credits, subsidized public/private housing, emergency housing, HEAP, Emergency HEAP, subsidized housing purchases, subsidized home improvements, free furnace/boiler maintenance/repair/replacement, winterization/weatherization programs, STAR school tax exemptions, food stamps, WIC, food bank supplements, free/reduced school lunches, transportation assistance, wheels-for-work, daycare, Medicaid, lifeline phone, free cellular phones/minutes etc.

Well over 50 Percent of local property taxes in some regions pay just one bill - Medicaid.

Many people have low incomes and few assets by choice, plus many people have multiple cash/barter income streams from underground economy jobs and services which aren't counted.

Many of the poor also have undocumented cash and assets due to theft from stores, businesses, neighbors, tenants, landlords, relatives etc.

[MarkJ]

I think that there are a lot of places where the poor are invisible. Here in Maine that's not the case. The rich live right next door to the poor.

Locally, most of the poor are concentrated in blighted sections of older urban areas. In some of these areas, only a few hundred yards separate upper middle class and wealthy neighborhoods from neighborhoods of slumlord properties and run-down, foreclosed, vacant abandoned, condemned and tax seizure properties.

The poor are actually more visible, since many of them don't own vehicles and don't work. Because of this, they're often more visible since they walk, hang out on streets and hang out on porches.

A Rising Tide Of Poverty: Tech Valley's Economic Gains Bypassing Inner Cities



The census numbers are clear. The contrast is stark. Increasingly, the Capital Region is developing into a place populated by haves and have-nots.


While suburbs and many city neighborhoods have mostly prospered, some inner-city sections of Albany, Schenectady and Troy are like doughnut holes -- up to 10 times poorer than areas surrounding them, according to U.S. census data.

And experts say there has been no trickle-down effect for poorer households here. Urban poverty is rising while upstate growth centered on Tech Valley continues.

Economic integration is so lacking that roughly a third of Albany, Schenectady and Troy residents currently survive on less than $20,650 a year, the federal poverty level for a family of four, according to recent census estimates.

"The numbers keep climbing," said Harris Oberlander, CEO of Trinity Institution, a social service agency in Albany. Oberlander saw Trinity's food pantries in Arbor Hill and the South End serve 4,700 people last year -- a mind- number, he said.

In Albany's West Hill, impoverishment rose from 21 percent 31 percent from 1980 to 2000, census data show. One South End tract jumped to 45 percent poverty during that time.

That compares to less than 10 percent poor in adjacent Bethlehem. Bethlehem's median household income was $63,168 in 2000, compared to $16,158 in the South End neighborhood between Madison and Fourth avenues.

Exacerbating the problem locally, experts say, is a severe housing shortage.

"There's a real big disparity between what people make and what the rents are," said Maria Markovics of United Tenants of Albany. "A lot of people just aren't making it."

Investors who might make a difference aren't coming into areas like Schenectady's impoverished Hamilton Hill, observers say.

Instead, scores of two-family homes have been chopped up into smaller apartments to make quick profits for nonresidents, Schenectady Mayor Brian U. Stratton said. "Absentee landlords are our worst nightmare."

But if, as some economists argue, a "rising tide lifts all boats," why haven't the Capital Region's inner cities benefited from wealth that surrounds them?

Exchanges are rare, experts say, and often restricted to suburban commuters driving through poor neighborhoods on their way to work.

"There's really no connection between the suburbanite and inner city," said Robert Jones, associate professor of economics and chair of the Economics Department at Skidmore College.

Suburbanites "don't shop, except for lunches. In the older days, the big department stores were downtown."

Economic opportunity has bypassed many poor residents since they're unemployable by today's much tougher employee qualification and pre-employment screening process. Many lack a high school diploma and can't pass a background check drug test, aptitude test, physical assessment and performance reviews, plus many lack reliable vehicles, off-street parking, clean driving records etc.


Many jobs we're adding to the local economy require a technical education, college education, certifications, professional licenses, knowledge, experience, skills, multiple skills, reliable transportation, trucks, tools, equipment, commercial licenses etc.

[Tyler_JC]

The underground economy is important to consider as well but I'm not sure of its impact on inequality.

If you take 99 poor crack dealers "earning" $15,000/year and one drug overlord earning a million dollars a year, inequality would grow substantially.

The crack dealers could likely hide all of their income and appear on a government statistic as unemployed and earning no income (but receiving some kind benefits). The drug overlord would likely have to own some fake business as a front for his illegal activity. He would appear on the government statistics as a laundromat owner or something like that with an income of, say, $750,000/year.

Alternatively, imagine that I earn $10,000/year legitimately and steal $5,000/year worth of plasma TVs.The rich guy whose plasma TV I took won't record his lost property as lost income even though it takes real income to replace the property.

He is worse off and I am better off but the government statistic-makers won't pick this up. Mostly because I, as a hypothetical TV thief, am not likely to record my ill gotten gains on a tax form.

Regardless, I don't think we should be relying on theft as a mechanism for social equality.

[MarkJ]

The underground economy that helps the income challenged is performing cash, partial cash or cash/barter jobs and services in addition to working legit jobs and/or collecting numerous public assistance benefits or numerous unemployment extensions.

Often the cash incomes are higher than the incomes from the legit jobs which are often low paying part-time jobs with frequent layoffs, slowdowns, terminations etc.

In the underground economy, people often create their own work whether it's renting rooms, subletting apartments, laundry services, shopping services, senior care, daycare, cleaning services, adult services, handyman services, painting, landscaping, odd jobs, contracting, home improvements etc.

Many of these people are unemployable in the legit economy, but their cash customers often don't care if they dropped out of high school, can't pass a background check, can't pass a drug test, they're slow, unlicensed, uninsured and unqualified, as long as the price is right and the work isn't really, really bad.

Many of these underground economy workers (especially in the construction/service trades) land jobs professionals can't do since they're working without shops, inventory, equipment, licensing, plans, permits, inspections, insurance and warranties. This allows them to cut corners, violate codes and offer lowball cash prices.

The underground economy jobs also help the poor that have been screwed out of jobs by Minimum Wage increases. They may be worth $3 to $5 per hour cash for temporary or part-time unskilled jobs but not $7.25.