How much inequality is too much? The range of income and wealth inequalities in the US has increased sharply in the past 20 years. The share of income flowing to the top 10% and 1% has increased significantly. And the level of income for the bottom 40% has slightly declined during these years. But to say whether that’s a bad thing, we need first to think clearly about what inequality means for our society — for the quality of life for people at the bottom end, for the strands of community that knit a society together, and for the idea that every member of society is equally worthy of respect and consideration. And we need to think about the mechanisms through which these inequalities are created in our economy — and through which these inequalities have increased so sharply.
First, the effects. It appears also to be a fact that the symptoms of poverty are more extensive today than they were twenty years ago. The demands on food banks have increased; homelessness appears to be more extensive in many major cities; and of course the problem of lack of access to health insurance and affordable health care appears to be even more pressing. So it would appear that the increase in income inequality in the past 20 years has had a depressing effect on the lives of the least-well-off in our society. At least the economic processes that have improved the incomes to the rich and the super-rich have not also improved the incomes of the middle-income groups and the poor. So the philosophers’ argument — inequalities are not inherently bad if the bottom end is pretty well off — doesn’t apply to today’s circumstances.
Second, there is some evidence that the social distance between the very-well-off and the not-well-off has increased, with fewer points of contact between social groups. This is sometimes described as the “disappearance of the middle class.” The substantial transformation of the American economy that has occurred in manufacturing and the auto industry is emblematic: the jobs that created the possibility of a blue-collar, middle class life in Michigan, Ohio, and Illinois are disappearing, and the next generation of manufacturing jobs are creating incomes that are perhaps only 60% of the levels of the previous generation. So rising inequality is manifest, in part, in the loss of well-paying jobs in the middle — producing a greater degree of social separation.
This brings us to respect and equality. It isn’t too much of a stretch to infer that in a society increasingly separating into “affluent” and “poor”, the idea of basic democratic equality — that everyone is in the same boat; that everyone has an equally worthy life; that we all depend on each other; and that everyone is equally worthy of respect — has less and less social reality. These widely separated groups have less and less lived experience that reinforces these ideas of connection and equality among all citizens.
So there are ample reasons for judging that the rising material inequality in America is a very bad thing. It is bad because of the consequences it has for people on the lower end of the spectrum; it is bad for the corrosive effects it has on basic democratic values of fundamental human equality; and ultimately it has to be bad for the civic values that undergird a peaceful and harmonious society. How much inequality can a community absorb before it begins to pull apart into mutually antagonistic groups? How many more gated communities will this society need if we continue to fail to achieve the kind of material fairness that allows every citizen to look the other in the eye and say, I respect you and I know that all our benefits depend upon our mutual contributions to society?
If our economy continues to separate our society into rich and poor — if our largest cities continue to intensify the inequalities of access, opportunity, and quality of life between the urban poor and the suburban affluent — then surely we have some seismic social conflicts brewing.