Income inequality, the 99 percent, the one percent, richer rich and poorer poor. It always seems that everyone is up in arms about income inequality, and how we need to race toward income equality.
Sounds like a good idea, right? Well, let’s try an experiment. Imagine you’re in class and you studied all day and night for the final. When it’s all over the teacher, being a fan of equality, decides to take the highest grades and even them out with everybody.
You now have a C, even though you originally earned an A and the slacker in the back corner deserved his F. That’s just a quick little show of how income equality works.
It doesn’t matter if you work harder than a salmon swimming upstream, you still get the same pay that the average McDonald’s employee would receive. I’m not saying that McDonald’s employees don’t work hard, it just isn’t fair for the CEO and the janitor to receive the same pay.
Besides that, let’s see how other countries’ attempts at income equality resulted. We have the Soviet Union, which collapsed in 1991, and in more recent times Greece. Greece tried so hard for income equality, sharing social benefits until its own economy collapsed, now the rest of the planet’s economy is in jeopardy.
I’ve also been hearing this little slogan about the rich getting richer and the poor getting poorer, yet there is no true link connecting poverty with income inequality. Don’t believe me? Then let’s look at it scientifically.
We have an interesting little term in the wide world of statistics called the Gini Coefficient. It’s a number between zero and one that shows the income equality range of a country — zero being complete equality where everyone is given the same pay, and one is complete inequality, where one individual would exclusively make money.
America currently has a Gini coefficient of 45 and a poverty rate of 15 percent, however China’s Gini coefficient is 47.4 and a poverty of 13 percent. That might not seem so amazing until you realize that over the last three decades China has lifted more than 600 million people out of poverty from its previous rate of 84 percent in 1980. All the while its income inequality shot up like a rocket.
This helps prove income inequality can have no effect on poverty. Instead what we need to focus on is income mobility, which is also on the rise lately. The difference between the two is that income inequality is the difference between the richest rich and the poorest poor, while mobility is how easy it is to climb and fall between the two — switching from rich to middle class or even poor to wealthy.
There is a man I know, he’s ex-military and a huge inspiration to me. Despite being homeless twice he has picked himself up and walked back into society. This man owns his own apartment with his wife now, attends Los Medanos College and in the Honors Program. He works hard, studies well and challenges himself everyday.
Through blood, sweat and tears he climbed through the economic and social ranks. If that isn’t a sign of good income mobility, I don’t know what is.