Is Reducing Income Inequality Really “Class Warfare”?

An essay in last Sunday’s Washington Post carried the title “Obama Shouldn’t Be Afraid of  Little Class Warfare” by Sally Kohn.

The piece opened with these points:

“On Monday, defending his plan to raise taxes on the rich to pay for job creation, President Obama said: ‘This is not class warfare, it’s math.’”

“No, Mr. President, this is class warfare — and it’s a war you’d better win. Corporate interests and the rich started it. Right now, they’re winning. Progressives and the middle class must fight back, and the president should be clear whose side he’s on.”

The article went on to make its case with some history and some very interesting data about increasing income inequality in the U.S.  The statement that I found to be most provocative was this:

“After all, according to the CIA, income inequality in the United States is greater than in Yemen.”

The link above took me to the CIA Factbook which publishes an index that measures income equality or inequality among all families in each country.  A country with perfect equality would have a score of 0 and a country with perfect inequality would have a score of 100.   (Note – perfect equality according to this measure does not mean that everyone earns the same amount, but rather that all discrete income levels, from richest to poorest, contain about the same number of families.)

It’s good to be able to see so graphically how the U.S compares to other countries.  The U.S. is indeed much closer in terms of inequality to some of the most unstable countries in the world.

Here are some of the CIA Factbook Entries comparing the U.S. to other countries:

US:     45 (2007)   (40.8 in 1997)

Sweden:  23

Norway: 25

Germany:  27 (with one of the most robust economies in the world)

Spain:  32

Switzerland:  33.7

United Kingdom:  34

India:  36.8

Indonesia:  37

Yemen: 37.7

Israel:  39

China:  41.5

Russia:  42

Rawanda:  46.8

Mexico:  48.2

Zimbabwe 50.1

Zambia:  50.8

Columbia:  58.5

Bolivia:  58.2

Haiti:  59.2

Sierra Leone:  62.9

To illustrate the inequality in the U.S. Kohn’s article also gave these facts among others:

“Between 1979 and 2007, the income gap between the richest 1 percent of Americans and the poorest 40 percent more than tripled. Today, the richest 10 percent of Americans control two-thirds of the nation’s wealth, while, according to recently released census data, average Americans saw their real incomes decline by 2.3 percent in 2010. Though our economy grew in 2009 and 2010, 88 percent of the increase in real national income went to corporate profits, one study found. Only 1 percent went to wages and salaries for working people.”

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