More on American inequality

Perhaps it is the spectre of high unemployment but for whatever reason many articles are being published on American inequality at present.

Michael North and Dan Ariely produced a short version of their argument on widening inequality (see 24 October blog post) in an op-ed piece in the Los Angeles Times.

Over at the New York Times several of their topic columnists were discussing similar themes. Nicholas Kristof argued that America is becoming a banana republic while Bob Herbert discussed a book by Jacob Hacker and Paul Pierson on how the rich are getting the bulk of rewards of growth. Paul Krugman pointed out on his blog that the average life expectancy for the top half of the income distribution was growing much faster than the bottom half.

Meanwhile, from a German perspective, Marc Pitzke in Speigel online argued that high unemployment is impoverishing many middle class Americans.

All these trends are worth discussing but it is important to avoid a common confusion. Rising inequality does not necessarily mean falling living standards for the poor. It is possible for inequality to widen while absolute living standards still rise.

My preference would be for a society that is both richer and more equal. On the other hand, I would strongly resist “green egalitarianism” in which everyone is encouraged to make sacrifices.