Replace Income Gap/Inequality with better metrics

Income inequality in the United States is at an all-time high, according to a report Friday in the Huffington Post. The study by University of California Berkeley Professor Emmanuel Saez shows that the gap is even higher now than during the great depression.

According to the Wall Street Journal, the gap is widening in part because of rising healthcare costs that employers are shifting to employees. Tom Freston, former president and CEO of Viacom says that there are a billion people at the bottom of the world’s income. I also found that the gap is the lowest in Beijing and highest in Hong Kong, and Singapore’s gap is larger than the U.S. and Britian.

Every report I found on income equality, and I found a lot, imply that a large gap is bad and a small gap is good. I am not so sure.

Should we really be worried about this thing called income gap or is this just a symptom of what many call wealth envy? I don’t care that some CEO earns 500 times what I earn unless I own stock in that company; in that case I want to make sure he is worth what he earns. That Hollywood stars and athletes make zillions more than I do is none of my concern. That Hollywood stars and athletes make zillions more than teachers, nurses, police, and fire fighters is an example of the silliness of our society.

We live in a screwed up world. My dog recieves a higher quality of food and health care than far too many children in this world. Before you scream at me for taking such great care of a dog and not giving that money to needy people, let me remind you that if everyone in my neighborhood did that the vet and the people at the pet supply store would join the list of the needy. Besides, if you have any kind of pet you can probably say the same thing about the quality of care your pet recieves. It’s not that we lavish so much on pets, it’s that too many children live in conditions where there is no where near enough quality healthcare and food for them. I for one, would like to fix that.

So why are we worrying about the income gap? Why do we care if other people make so much more than we do, or more than someone else does? Wealth is not a finite pie where if someone gets a giant slice you’re left with a small slice. Wealth is more like a seed, meaning you plant one and when it grows into a plant it provides a lot more seeds, each of which can then grow into a seed producing plants of its own. Wealth enables investment and commerce which means more wealth and opportunity for everybody. If the wealthy get wealthier they either spend or invest their money and both of those options benefit those of us that are not wealthy.

I would like to see measures that show how quality of life has improved for the other income levels correlated to the growth of wealth at the top end. Those measures need to include the power of our money to buy goods and services, the quality of shelter (air conditioning?), the gadgets and toys per household, vacations, house size, variety of foods eaten, and number of meals eaten out of the house, our health care, and any other measures that make 21st century life in the United States superior to anything anywhere else.

Focusing on the right measures will establish a realistic view of just how much the overall quality of our lives has accelerated in recent years. I think that people will realize that their hard work has paid off very nicely, so people will be inspired to seek more education, have more ambition, and develop self reliance; qualities that will help create more wealth at all levels while helping the poor pull themselves out of poverty.

Tagged as: economics, economy, impoverished, income, income gap, income inequality, poor, poverty