Sunday, January 30, 2011

Are Americans Complacent

Egyptian, Tunisian and Yemeni protesters all say that inequality is one of the main reasons they're protesting. However, the U.S. actually has much greater inequality than in any of those countries. Specifically, the "Gini Coefficient" - the figure economists use to measure inequality - is higher in the U.S.

Gini Coefficients are like golf - the lower the score, the better (i.e. the more equality).

According to the CIA World Fact Book, the U.S. is ranked as the 42nd most unequal country in the world, with a Gini Coefficient of 45.

In contrast:

* Tunisia is ranked the 62nd most unequal country, with a Gini Coefficient of 40.

* Yemen is ranked 76th most unequal, with a Gini Coefficient of 37.7.

* And Egypt is ranked as the 90th most unequal country, with a Gini Coefficient of around 34.4. ( similar to the UK figure )

Why are Egyptians rioting, while the Americans are complacent?

One reason is that Americans consistently underestimate the amount of inequality in the nation. Americans thought the richest 20 percent of US society controlled about 59 percent of the wealth, while the real number is closer to 84 percent.

1 comment:

Anonymous said...

Hi Alan, You've used this measurement in your blog BEFORE, the gini Coefficients, not sure what it is. Can help?

I've googled it, seems to mean little to me, maybe, I'm slow or a bit thick. lol Someone has already stated that it has something to do with spending power? And argues that: "Universal starvation would also be a form of equality."

I replied with the link, www.1billionhunger.org __________________________

"If an entire population in State A earned 1 pound per day (except for a few on top), there would be great equality.

If, by contrast, the poorest in State B earned 50 pounds a day, and the richest earned 5000 a day, there would be great inequality.

Assuming, of course, equivalent purchasing power of one pound in the respective economies, the poorest in State B might well complain (or indeed might remain "complacent" about) their inequality. But they would still be 50 times wealthier not only than the poorest in State A, but 50 times wealthier than the average person in State A.

In fact, the USSR did indeed have greater equality than the USA during the same period, in the sense that it strongly resembled State A.

In other words, it is false to say that sheer equality of purchasing power, even in State A, is an unqualified good. Universal starvation would also be a form of equality." Unqoute.