Consequences of Wealth Inequality

By Ana Brenescoto

Data on wealth inequality has made the subject a very hot topic, since the media is full of stories covering the lives of the super-rich. For example: the hedge-fund managers who earned at least $240 million last year. The truth is that with time the rich keep getting richer, and this happens because the higher your income, the more your income will grow. The figures prove it: if we compare the income levels (adjusted for inflation) of American  households in 1979 to households in 2004 we will see that the lowest fifth’s income only grew by 2%, the second fifth by 11%, the middle fifth by 15%, the fourth fifth by 23% and the top fifth by 63%.

Inequality has reached record levels in many countries, and wealth more than income show this growing gap. In the year 2000, the top 1% of the world’s population accounted for 40% of the world's total net worth, while the bottom half owned only 1.1% of the globe’s wealth. This widening gap show the ways in which developed countries have found methods to develop, experiencing economic growth, while developing countries have been left behind.

Americans have accumulated much of the world’s wealth. The United States accounts for 4.7% of the total population, and have 32.6% of the wealth. The average american has a net worth of $144 000, while the average net worth of the world’s typical person is of under $2,200.

Now, an important question to ask ourselves is: what are the consequences of this level of inequality? And who does it affect? Well, it obviously affects the poor, and I will go into this point in a moment, but many academics also claim that economic inequality affect everyone. British epidemiologists Kate E. Pickett and Richard G. Wilkinson believe that more equal societies almost always do better. They claim that severe inequality undermines social bonds, dashes the health of millions, contributes to mental illness, it increases obesity and teenage pregnancy, it fosters crime and it lowers life expectancy. These ills don’t affect just the poor.

They affect everybody, but very predictably: the poor. The consequences in everyday lives for these millions of people range depending on location, level of democracy and general living standards. Almost half of the world’s population live on less than two dollars a day, and about 20% live on less than a dollar a day.

The poor often live in areas that have no sewage or clean water, making them more susceptible to illness and disease. They also lack in means to obtain access to health care. At the same time, they lack information on general health and safe sex practices; which results in this demographic being uninformed on measures they can take to avoid risks.

In many countries, many try to escape poverty by moving from rural to urban areas within their own countries as well as in foreign countries in the search for jobs, but in most places there aren't enough decent paying jobs. In addition, poor people tend to live in the margins of the cities in informal settlements, barely scraping by, and enjoying little or no social

protection. It is estimated that of the global workforce of a three billion people, 140 million are unemployed, and between a quarter and a third are underemployed.

In many countries that exhibit high levels of poverty, inadequate access to land is one of the major challenges. Most of the world’s poor own no land at all, or land that is not worth owning. This land is of poor farming quality and often subject to damage from storms and other natural disasters.

The organization therules.org have released a video that exemplifies un in a visually effective format the levels of inequality we experience today, and the the policies that support this system: (https://www.youtube.com/watch?v=uWSxzjyMNpU). Even then it is extremely difficult to make sense of these numbers in more than just numbers, because the grand majority of Wheaton students and friends and acquaintances of Wheaton students have never met a person who lives with less than $2 a day. So the question is: what do we do with all of this information? How can we use this information and make a change- even a small change?

Works cited:

Lowenstein, Roger. "The Inequality Conundrum." The New York Times. The New York Times, 09 June 2007. Web. 22 Oct. 2014.

Porter, Eduardo. "Study Finds Wealth Inequality Is Widening Worldwide."The New York Times. The New York Times, 05 Dec. 2006. Web. 22 Oct. 2014.

"Global Wealth Inequality - What You Never Knew You Never Knew."YouTube. YouTube, n.d. Web. 22 Oct. 2014.

"Themes." The Rules. N.p., n.d. Web. 22 Oct. 2014.

Hunter, Robert. Poverty. New York: Macmillan, 1904. The United Nations. Web. 20 Oct. 2014.

Porter, Eduardo. "Income Equality: A Search for Consequences." The New York Times. The New York Times, 25 Mar. 2014. Web. 22 Oct. 2014.