Sometimes it’s what’s left out of a news story that makes the reporting disappointing, because omissions may leave readers lacking critical information. I was reminded of this in a recent piece in the New York Times, which reported that after three decades of rising income inequality in the United States, the richest Americans “have gotten poorer” in this recession. Whereas the top 1 percent of earners took home 9 percent of income in the late 1970s–and 23.5 percent in 2007–their share may now be falling, according to economists cited in the story.
The article seemed to worry that the demise of the super wealthy could be a problem for the U.S. because it portends fewer charitable donations and lower revenues to federal and state governments. And these adverse impacts could be greater than in earlier economic downturns, because the wealthy in 2007 were so much richer, relative to the rest of the population, than in the past. So much of this article on inequality examined whether the super-rich would regain their pre-2008 status anytime soon.
But this reporting begs a fundamental question: should the wealthiest re-establish their previous levels of privilege? Beyond the question of basic fairness, are there reasons to favor greater equality in society over greater inequality?
Apparently so. A new book entitled The Spirit Level: Why More Equal Societies Almost Always Do Better, by Richard Wilkinson and Kate Pickett, argues that a host of benefits accrue to societies that make greater equality a policy priority. According to a Manchester Guardian review of the book, in societies that favor growth over lessened inequality, many people have shorter and unhappier lives. Rates of teenage pregnancy, violence, obesity, imprisonment, and addiction all rise in societies of inequality. In addition, greater inequality is a driver of consumption, which often has adverse environmental effects. (I look forward to reading this work. If you already have, what do you think of this argument?)
The benefits of a less-skewed society, entirely ignored by the Times article, are indispensable to a full discussion of inequality. This discussion is long overdue in the United States, but it may be coming. The article notes that tax rates for the richest in the United States under the Obama administration could rise from 36 percent to 39 percent, likely nudging the country toward greater equality. (Note, however, that in the three decades following World War II, according to the Times, the top marginal tax rate ranged from 70 to 91 percent–a large part of the reason why U.S. society was more equal then.) Much debate will undoubtedly ensue over this. Let the debate begin–but let it include the full range of issues, including the societal benefits of greater equality.