America in Despair

Inequality has been a topic of interest for many social scientists. It is generally meant to cover the realms of income distribution, wealth, and other socio-economic opportunities. Today, the scope has broadened to many unexplored areas: health.

As I read a piece from the Harvard Magazine, titled “Unequal America,” I was astonished by how the perpetual growth in inequality can have significant effects on both the psychology and the health of the people. As an economists, this is a reminder that when we analyze factors of inequality, it is rather shallow to be adamant to stick to our conventional indicators (employment, wages, etc.); as much as they are relevant, unquantifiable factors must also be considered into our academic analysis.

America is trapped. In the early twentieth century, the top 1% of Americans earned 18% of total national income. In 1928, this figure rose, with the top 1% of Americans earning close to 22% of total national income. The trend of inequality subsided and was again somehow leveled across the population in the 70’s. Now we are once again in the declining state, with inequality rising even higher. Out of all the developed countries (OECD members), the US scored poorly with a Gini coefficient of 0.45 today from 0.35 in 1965 (a measure of inequality ranging from 0 to 1, with 0 as full equality and 1 being completely unequal), in other words the US income gap is much closer to Iran, Argentina, and Mexico than it is to its counterparts. According to the US Census Bureau, 12.3% or 36 million of Americans lived below the poverty line. What seems to be the problem? And will this trend persist?

There are a few reasons why the problems of unequal distribution of income and opportunity are endemic in our society and it is more than just economic and social per se, it lies fundamentally in its cultural, historical, and the political context of the country.

The first is culture. I shall categorize culture as the umbrella or the focal point in which all other social explanation are derived. The two major cultural characteristics that are dominant in the United States are the individual freedom and competition. These mentalities are already apparent even when one observes how children behave with one another as early as in primary school. And I would assume (from my own experience and observation) that this attitude grows gradually as one aged. The nature of individual freedom and competition are traits that can be traced back from the periods of the founding fathers. The US constitution is filled with phrases of how freedom is innate and that “man” has a full right to reap the fruits of its labor.

With hard work, one can get you anywhere in life. In fact, it is this very mentality that defined the path to wealth and prosperity. In addition, many Americans believe that when one is destitute that is because you are lazy and cannot utilize the opportunity given to you. Thus, people become reluctant to redistribute their wealth. Individuals enjoy the fruits of their labor right do not see the failure of others as the responsibility of one’s own.

What people failed to acknowledge with this argument is that it is assumed the level of playing field is equal. We take granted factors that questioned race, class, and other highly debated issues of social safety nets. The poor are exposed to many hidden living costs. Even after having 2 to 3 jobs, the poor still cannot pay their health bills in full and sustain a timely rent payment (see Nickel and Dimed by Barbara Ehrenreich).

The second factor is consumerism; in which keeping up with the Joneses is important to uphold and is part of our social existence. The economist Lawrence Katz gave an interesting depiction, his analogy of an apartment building. He said, “over the past 25 years, the penthouse has gotten really, really nice. All sorts of new gadgets have been put in. The units just below the penthouse have also improved a lot. The units in the middle have stayed about the same. The basement apartment used to be OK, but now its gotten infested with cockroaches and its been flooding.” This is a nutshell description of class struggle under a capitalist society. Individuals are deprived because it is driven to catch up with others in order to be accepted in society.

The third point of interest is the American political structure. I’ve heard people say that politicians just really don’t give a darn about the wellbeing of the poor. I’ve also heard the contrary argument saying that poor people just fail to participate in the electoral processes; in other words the poor and the uneducated are not voting actively enough, which can then result in electing someone who is not representative of their interest. The problem here is none of the above; it is the setup of the current political system that is hindering the democratic processes. Politicians’ main job is to have a job and work towards getting reelected. And to get reelected, politicians need a substantial amount of funding that will most likely come from the middle and higher income bracket. It is not that politicians don’t want to listen to the demands of the poor; they just can’t afford losing out on donations.

Where do these complexities leave us? How is the rise of social inequality related to health? Social scientists have coined the term “relative deprivation” to illustrate the psychological damage that one had to endure when seeing other people having more than our own propensity to consume. Thus, the psychological challenges create higher stress level that may contribute to health problems such as depression, heart attack, and others. Relative deprivation can also encourage the usage of temporary stress reliever, such as cigarettes and alcohol. The use of these substances undoubtedly contributes to many incurable sicknesses. Obesity may also be included in the list. As the race to the bottom continue, more and more people would only afford cheaper quality food that is less nutritious for the body.

Disparity in the US is real. Especially with the current economic condition, inequality will continue to roam for quite some time. The factors mentioned above I believe are only a part of the general problem. There are other explanations that I must have failed to include.

Despite the social frustration, there is a sliver of hope. There are many ways to mitigate the issue. We can start by revisiting the current political structure of the US. Perhaps an electoral process that offers an equal playing field for all. More awareness and education can also help battle the conventional belief that economic prosperity should not just be an individual right, but can also be a collective effort.

I hope this can spark an interest in you. Feel free to drop your feedback.

b dj.