Visualizing Income Inequality

Gini Coefficient Map

Map Source

The Gini Coefficient is a measure of income inequality. The greater the coefficient, the greater the inequality. The values lie between zero and one, but generally a very egalitarian country will have values under 0.3 while the countries accepting the greatest inequality have values above 0.5.

The map shows that the United States is grouped with China, Mexico, Argentina, Venezuela, Uruguay and Ecuador as having grave levels of inequality. The Scandinavian countries, western European countries, Canada and Australia all have far more equal distribution of income.

Shares of Pre-Tax Household Income

Source of Graph

The divergence of incomes (and the even greater divergence of wealth) has occurred in the past three decades. The current levels are approaching those in 1929 just before the stock market crash, and are far higher than during the long period of rapid economic growth after World War II.

This level of income inequality seems likely to be very disruptive to the social and political fabric of the country. I find it hard to believe that the United States should not tax millionaires more. Indeed, I feel that the Congress is far to beholding to the rich, and that government policies have promoted inequality rather than equality, to the cost of the entire economy.