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Economic Inequality Is Bad For Your Health



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This is a long TED video, but it is well worth your time. Richard Wilkinson shows solid data in support of the Occupy Wall Street movement across the globe. The 99% protesters believe the corporations and the top 1% earners are taking an unfair slice of the pie. One solution is to raise the tax on those high income earner to redistribute the wealth. That’s fine with me, but I think the 47% of people who are not paying any federal tax should pay up as well.

Most of my blogger friends believe the opposite. Financial Samurai’s post To The 99% Protestors: You Do Not Represent All Of Us sums this up pretty well. Most if not all of the financial bloggers believe in hard work and are actively striving to reach the 1% income bracket – about $380,000/year. It sounds like they are very annoyed with the 99% movement and wish they would get their butt in gear and find a job.

Which camp is right? The 99%, the 1%, or the 53% (people who are annoyed at the 99% protesters.) Wilkinson’s research shows that countries with high economic inequality have more social problems. As I looked more into this, I found other researches with similar conclusion. The people of countries with high economic inequality are also less healthy overall than countries with more equality.

countries economic inequality

See the USA?

Statistically, the richer you are the more healthy you will be. This makes sense.

What is surprising is that rich people in high economic inequality countries are less healthy than their counter part in the more equal society! Why is that? I don’t know, but perhaps the healthcare system is stretched thin to take care of poor people who couldn’t pay their bills. When poor people can’t afford long term health care, the cost goes up because short term and emergency care are more much more expensive. See my post on Reducing Healthcare Cost by Providing Better Care. IMO, this cause the overall quality of healthcare to go down for everyone. Does this sound familiar?

Another surprising finding is that we see similar graph when Wilkinson collected data state by state in the US. We see similar pattern emerging even in the same country. This is shocking to me because we all have the same federal government and similar lifestyle. How can there be such a different? I can improve my healthcare and deal with less crazy people by just driving across the state line? I guess I made the right choice when I moved from CA to OR years ago.

US states economic inequality

Where do you live? Can you move to a neighboring state and have a better score?

Wilkinson glossed over causality, but I don’t think it matters all that much. Progressive people think income disparity cause social problems and Conservatives think the reverse. To me if I live in Louisiana, I would want to move to a better spot. Who care which way the causality goes?

So what do you think? Assuming this data is accurate, wouldn’t it be better for the country as a whole to raise the tax on the top 1% or top 20%? Sure it is better to be rich, but being rich in a more economic equal society is even better yet.

ps. Communism is not the answer because –

  1. Communist countries are poor and we are only talking about rich countries.
  2. The people in charge are much more powerful and wealthy than the regular people. Economic inequity in China is on the same scale as the US according to Wiki.
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Joe started Retire by 40 in 2010 to figure out how to retire early. He spent 16 years working in computer design and enjoyed the technical work immensely. However, he hated the corporate BS. He left his engineering career behind to become a stay-at-home dad/blogger at 38. At Retire by 40, Joe focuses on financial independence, early retirement, investing, saving, and passive income.

For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.

Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.
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{ 86 comments… add one }
  • youngandthrifty November 2, 2011, 1:02 am

    Hey Joe!

    Just curious, is the Occupy Portland site still up in your neck of the woods? Our Occupy Vancouver site is still live and well 🙂

    • retirebyforty November 2, 2011, 9:00 am

      Yes, Occupy Portland is still going strong here. They were trying to spread out to other parks, but the police are arresting those people who try to set up camps elsewhere. I dropped by last weekend, but didn’t stay long. The 2 original parks are completely filled with tents now.

  • Brave New Life November 2, 2011, 6:02 am

    The argument of causality is important when displaying charts like this. Does income inequality cause unhealthiness (life expectancy, violent crime, etc), or do these unhealthy things cause income inequality? Yet another option is that some third factor causes both.

    Regardless, I find it difficult to digest that anyone can argue that we live in a plutarchy – and that there are very few winners in this system.

    • retirebyforty November 2, 2011, 9:01 am

      Causality is important if we want to find the problem and fix it. If I was in a bad location, I would probably move before fixing the problem.

  • cashflowmantra November 2, 2011, 6:29 am

    A very interesting video with lots of good data. I will probably write a little something on it at my blog as well. Causality is an incredibly important question because unless one arises at the right cause when addressing a problem, unintended consequences can result.

  • Matt @ Financial Excellence November 2, 2011, 6:41 am

    I found it interesting that he said it doesn’t matter how you close the gap – redistribution of wealth, or other ways all have the same effect as long as you’re closing the gap. I’m not a fan of redistributing wealth. I’d prefer to help the poor by giving them the skills to improve their situation(s). Interesting video overall.

    • retirebyforty November 2, 2011, 9:02 am

      I thought that was interesting as well. I prefer to equalize wealth distribution by increasing the lower 20% earning power as well. I feel that corporations are working against this though.

  • Little House November 2, 2011, 6:43 am

    Very interesting data. I like analyzing statistics and this data makes a point – however, I also know that sometimes the variables that were measured or looked at can be quite biased. It’s interesting that most of the Scandinavian countries have less inequality in income and better health. Must be that cold weather!

    • retirebyforty November 2, 2011, 9:04 am

      Must be all that Lutefisk! 🙂

  • Kellen November 2, 2011, 7:32 am

    The income inequality is such an accepted way of life… I live with a roommate who has a college degree, but makes 1/2 the income I do, after the same amount of time in the work force, because I’m an accountant and she’s a therapist. And most of the time, this seems reasonable to me – since she could have chosen to be an accountant if she wanted.

    Don’t get me wrong, I understand that the free market values our professions differently, it is just weird sometimes to stop and think that my work is considered twice as valuable as hers? (Probably not that high of a factor, since I work many more hours than she does.)

    • retirebyforty November 2, 2011, 9:06 am

      I think they are talking about 10x or 100x income disparity. I don’t mind that the CEO makes 20x the worker’s salary, but do they really need 500x?
      After all, it’s been shown that 20x or 500x doesn’t make a difference in performance.

      • [email protected] November 2, 2011, 11:51 am

        What’s need got to do with it? If the board of directors and the CEO are both comfortable with the salary, how does that become any of anybody else’s business, other than shareholders?

        Even well-paid CEOs generally get a straight salary well under $1mil. The rest is usually performance-based, which means, earned.

        • retirebyforty November 2, 2011, 3:30 pm

          It’s my business if the economic inequality affect my health care and cause more social problems where I live.
          What about the CEO that did a crappy job and still get paid millions of dollars?

          • [email protected] November 3, 2011, 1:54 pm

            It seems to me that the problem is covering other people’s bills, not their inability or unwillingness to do better.

            As far as the CEO, that’s between the board, the shareholders, and the CEO, not me.

  • Jeff @ Sustainable life blog November 2, 2011, 8:38 am

    Hey Joe –
    I think that a lot of financial bloggers don’t agree with occupy wherever because most of us have day jobs and have the blog as a side hustle to earn extra money. We didn’t go out and protest about unfairness, we changed our spending patterns and found ways to earn more money.
    As for the extra taxes, I’m not so sure i’m a fan, even though I wouldnt have to pay them.

    • retirebyforty November 2, 2011, 10:15 am

      I think the lower 47% should earn more money as well and start paying federal tax.
      We know taking money from the rich and giving it to the poor doesn’t work. If we can use that fund to train/educate them so their earning potential rises, that would be the best scenario.

  • Andy Hough November 2, 2011, 9:54 am

    This is some interesting data. I’ve been compiling information for my own post on OWS and will use this as well. I don’t think the topic has to be an us versus them thing. Everyone should benefit from less income inequality.

    • retirebyforty November 2, 2011, 3:22 pm

      Let me know when the post is up. I’ll come by and see what you found.

  • changeonabudget November 2, 2011, 10:16 am

    This post made me really excited because I worked on very similar research during my Political Economics degree.

    Increased income/wealth inequality negatively affects almost all quality of life indicators. Even when you are in a higher income bracket, growing inequality should still be a pretty big concern for you because it seriously affects your life, finances, health etc.

    I’ll probably be posting about this in a few weeks – I have to dig out some of my old textbooks first!

    • retirebyforty November 2, 2011, 3:22 pm

      Let me know when you post it. I’d like to read it and see your data.

  • Roshawn @ Watson Inc November 2, 2011, 10:35 am

    So that’s the reason you believe so many PF blogger are against Occupy Wall Street: PF blogger are biased because they want to become the 1%. I hear you and understand where you are coming from except it is unclear to me how one person’s extraordinary success prevents someone else from becoming successful.

    • retirebyforty November 2, 2011, 10:49 am

      I don’t know the reason why PF bloggers are against OWS. I’m just guessing and would like to hear their reasoning. 🙂
      Here is one example – CEO of a company cut 30% of the workforce and get $20 million dollars bonus.
      Or Phizer’s ex CEO, Jeff Kindler, who sent the company and stock tumbling for many years. He got $10 million in 2010 for resigning.
      I don’t like the extreme compensation that these 0.1% earners are getting. $380k per year on the other seems very reasonable for a hard working professionals. I don’t think that would hurt anybody else.

      • Financial Samurai November 3, 2011, 7:04 am

        I think you helped answer your question Joe. It’s the 0.1% earners and NOT the 1%.

        The 1% are a dime a dozen in SF, NYC and other big cities. Two MBA grads who are a couple from Berkeley make $380,000 at 30 for example.

        • retirebyforty November 3, 2011, 9:08 am

          The 99.9% just isn’t as catchy as the 99%. 🙂

          • Roshawn @ Watson Inc November 3, 2011, 5:18 pm

            LOL re: catchiness! Of course, I don’t want good people to lose their jobs. Here’s my issue though. If you get cut due to someone else’s bottom line (i.e., the same stockholders who demand that the CEO beat expectations to keep his job), does that mean that they have prevented you from excelling or just excelling with their company?

          • retirebyforty November 4, 2011, 9:12 am

            Sure, I see your point. If someone is motivated enough, he/she won’t let someone else dictate their success. Like Sandy at Yes, I am cheap. She had some problems with her previous business and accumulated a lot of debt. That doesn’t stop her from working hard to become successful.

  • Miss T @ Prairie Eco-Thrifter November 2, 2011, 10:41 am

    Very interesting video. It is really neat to see where other countries compare. Like Roshawn asks though, you don’t always stop someone else’s success with your own.

  • Eric J. Nisall November 2, 2011, 11:42 am

    Personally, I don’t care about the number or other data that economists, mathematicians, or anyone else throws at me. My biggest beefs are 1) they believe that everyone in the “99%” is on their side and they are the mouthpieces for the rest of us; and 2) they are sitting (or standing or laying, whatever they are doing) there, using more taxpayer resources, disrupting their “bretheren” since not all the people in the areas they are protesting are in the 1%, and quite frankly sound like a bunch of whiners.

    Why should we make the wealthy carry the rest of the population? Is this something new that we should penalize those who are innovators or business leaders? I have a hard time believing that the people protesting would be very sympathetic to this cause if the roles were reversed. Maybe I’m in the minority (my own 1% as it were), but I believe that people should work hard for what they want, and bitch and moan about what the other people are making or doing. Am I jealous of CEO’s and their pay packages and benefits? Sure, but they also worked their asses off to get to where they are. The only thing I can strongly agree on is the bonus structure and payouts for the highly compensated officers. Otherwise, why not protest Major League Baseball, the NFL, NBA, NASCAR, the PGA tour? Those athletes make much more ridiculous sums than a few CEOs on Wall St.

    • retirebyforty November 2, 2011, 3:28 pm

      1) Sure, I can see that would annoy you. 2) I disagree here and I think they should exercise their right to protest and make their cause more visible. You could say the same thing about many movements in the past – women right and civil right movements for example. Why are they whining? Get a job, etc…

      • Eric J. Nisall November 2, 2011, 5:23 pm

        I agree completely that they should be allowed to voice their opinions, no doubt. My problem is in the way they are approaching the effort. There are a large number of “working class” people that are being affected by the protests/demonstrations/whatever people want to call it and that is what is troubling me about it. There was an article someplace about a restaurant that let go of 21 people, which the owner claimed was due to the fact that the police barricades impeded his customers path to the place. I don’t know how much it was really a factor but that, along with the need for additional police presence (to keep things orderly) rather than focusing on real needs is what I was referring to when I brought up the taxpayer issue and their fellow 99%.

        • retirebyforty November 2, 2011, 10:29 pm

          They are also causing damage to the parks where they are camped. I agree that the police overtime is probably the biggest expense from the protests. It seems like they are flailing around a bit and if they can focus their agenda, they would be able to make progress toward real changes.

          • Eric J. Nisall November 3, 2011, 5:33 am

            I couldn’t have said it better myself!

  • [email protected] November 2, 2011, 11:54 am

    Am I the only one in favor of disenfranchising the people who don’t contribute? If you don’t pay federal tax, you shouldn’t be able to vote in federal elections. 🙂 I’m sick of people who have nothing material at stake voting for people who promise them candy that’s being bought with the money I bust my butt to earn.

    • retirebyforty November 2, 2011, 12:51 pm

      I like that idea actually. If you don’t contribute, why should you have a vote? 🙂

  • [email protected] November 2, 2011, 12:01 pm

    I’m against the OWS because, in this country, a huge part of your situation is up to you.

    I’ve worked with several people who moved to the US with nothing. Literally less than $500 and a small bag of clothes. They turned that into multi-million dollar businesses, through hard work and dedication. No family or government bailout involved.

    My wife went to school with a kid who was born in the ghetto. Crack deals in the front yard, highest crime rate zip code in the state. His dad worked his butt off during the day while going to night school to be able to afford to move his family to the burbs. Then he did it again. More night school, a better degree, and he moved his family into an upscale neighborhood.

    A good friend of mine got on a bus with a cross-country ticket and $50, 10 years later, he’s making 6 figures.

    His sister didn’t like her situation, so she packed everything she cared about into a backpack and walked to Texas. Found a place to live and a job, now she’s doing well.

    If these people actually wanted to improve their stations, they’d work at it instead of whining to be saved. Taking money from others isn’t a solution.

    • retirebyforty November 2, 2011, 10:33 pm

      That’s the American ideal. My family came to the US with less than $500 and a few bags of clothes and now I’m paying plenty of tax.

  • Aloysa November 2, 2011, 12:04 pm

    Communist countries are poor BUT it doesn’t mean that they don’t have economic inequalities. Where I am from, we had plenty! And rich was not necessarily healthy. 🙂 You see Joe, you say “communist” or “communism” and I jump on it. Too dear to my heart! lol Anyhow – I have a strange feeling towards Occupy movement. From one side, I agree with what they are saying. From the other – it is about time for them to go get a job and contribute something to our crumbling economy.

    • retirebyforty November 2, 2011, 10:34 pm

      I put the communist comment in there just for you!

  • krantcents November 2, 2011, 12:55 pm

    Good health is more than just money. The more educated and therefore more successful you are, it is likely you are healthier. I have great insurance, but there are some very unhealthy teachers in my economic group. I think it is up to the individual, however it helps how money and education does help the statistics.

  • jimroletter November 2, 2011, 2:46 pm

    Should society be pursuing a goal of income equality? And at what cost?

    I’ve done a good bit of travelling through europe and know many europeans as friends. I know many prefer their systems, benefits, etc but I’d rather take my risks over here in the US.

    I was having a conversation with a 20 year old german girl recently. She was going back to germany after a year here as an au pair and she would start school. I asked her what she wanted to study. She said “that doesn’t matter…it only depends on what spots are open.”

    I basically learned that the coveted majors are filled by the good test takers and the other people are left with less choices.

    I realized that caste type education system is the cost of it being free.

    • retirebyforty November 2, 2011, 10:36 pm

      Thanks for sharing some interesting facts.
      It still seems like a free/affordable college education is much better than the situation we have in the US now. Many students can not afford college and the student loans debt are getting bigger and bigger.

  • Alex | Perfecting Dad November 2, 2011, 3:21 pm

    That is shocking, that the wealthy are also adversely affected by income inequality. I don’t mind inequality at all, if everyone has the same opportunity and there are no crimes. If you invent facebook and it takes off and makes a ton of money then good on you. However, the US political system allows too much control to the wealthy. Politicians are bought all the time and asked to make laws that benefit the rich. You see the wealth redistribution that happened during the banking crisis where investors lost a ton of money, but they were simply paid off by the taxpayer. That’s ridiculous. If they strike it rich they keep it, if they get unlucky they lose it.

    Too bad that’s not what OWS is about. To me, the inequality in wealth creates a spiral because of what the wealth can buy (legislative favours)

    • retirebyforty November 2, 2011, 10:39 pm

      The inequality in wealth creates a spiral because of what the wealth can buy (legislative favours)
      OWS’ agenda is all over the map. The protestersI talked to emphasized limiting corporate campaign contribution and lobby.

  • Hunter @ Financially Consumed November 2, 2011, 4:36 pm

    Great presentation Joe. Judging from personal experienced based on time living in different parts of America and the world, I tend to agree with the assertion that equality is positively correlated with health and happiness.

    I am not thrilled to see MS and LA rank poorly on equality and health & social issues as we are moving to that part of the world very soon. I am determined to maintain a healthy outlook no matter where I live. There’s only so much I can do to control the social issues we are confronted with however.

    • retirebyforty November 7, 2011, 11:06 am

      Good luck with the move!

  • Barb Friedberg November 2, 2011, 5:40 pm

    The problem with the occupy wall street movement is not that they don’t raise some really important issues, but that it is not directed at the powers that be. There has to be an incentive to change. And, the powerful corporations on wall street who contributed to the mortgage melt down, have no reason to change.

    • retirebyforty November 2, 2011, 10:30 pm

      Who is the powers that be? Isn’t that suppose to be the people? I guess not in the corporate world.

  • Lindy Mint November 2, 2011, 8:17 pm

    I guess what’s important to me is that we still live in a country that fosters opportunity. I don’t bother worrying about what CEO’s make because I don’t work for a big corporation, and I never will. I appreciate the OWS members’ desire to make things change, but it doesn’t seem they are being very strategic about it.

    I have student loans and I don’t blame anyone but myself for acquiring them. I’ve seen my income go down and expenses go up but I’m fighting back by working harder and smarter. The logic of blaming some faceless wealthy CEO for my student loans and economic status doesn’t sit well with me, because I believe I’m in charge of my own destiny.

    • retirebyforty November 3, 2011, 9:09 am

      I believe I’m in charge of my own destiny as well. I hope that never change.

  • Financial Samurai November 2, 2011, 9:20 pm

    I’m definitely for raising taxes on the top 1% or top 10% if the rest of the 99% or 90% also pay more taxes as well.

    You tax someone making $1 million 10% more ($100,000), and the person making $50,000 10% more ($5,000), suddenly the person making $50,000 is $95,000 closer to equality to the richer man than before.


    • retirebyforty November 3, 2011, 9:12 am

      Everyone should pay some tax. The 47% should at least pay a little federal tax. It’s too bad the government is so bad at handling money. In an ideal world, the government can use the money to retrain people and start businesses at a minimal overhead. Unfortunately, the government is the same all over the world and are either inefficient or corrupted.

  • novel investor November 3, 2011, 12:55 pm

    What exactly does Occupy WallStreet want the government to do with the extra tax dollars if the 1% are taxed more? Putting money in the governments hands tends to be more wasteful than beneficial and who’s to decide what happens to it.

    Those living in countries with lower inequality and better health, tend to have to give up more than just income for that extra health. The standard of living alone in those countries are significantly higher than the US.

    • retirebyforty November 3, 2011, 1:11 pm

      It’s unfortunate that our government can’t be more efficient.

      Why are the standard of living in those other countries so much higher than the US if our income per capita is higher? I checked wiki and US is #7 and are higher than most of those countries on the chart. What else are they giving up? Someone mentioned that there are less choices for college education. I’m not familiar with high tax countries so I’m just wondering what else they are giving up.

      • novel investor November 3, 2011, 4:25 pm

        I’m only familiar with Denmark and Sweden from having family there. Both are welfare states. The school system is free but not guaranteed. After finishing 8th grade, kids take an aptitude test for further education placement. They can move ahead with the school they place for (vocational or college) or be done the school. And military service used to be a requirement but not sure if it still is.

        As far as taxes, both countries income tax sits in the 40-60% range, with 40% being the minimum for the lowest income earners. A far cry from the US’s 10% minimum. But only real complaint I hear all the time is cost of goods (food, gas, alcohol) are much higher because of taxes.

        It would be a big change for many to accept if we went down this road, but it works well for them.

        • retirebyforty November 4, 2011, 9:08 am

          8th grade is way too early to decide which direction your life should take. I think we need more vocational school here in the US, but not starting that early. Maybe the last 2 years of high school would be a good point to start.
          I’ll have to go for an extended visit one of these days to see how things work over there. 40% tax for the lowest income earners seems quite high.

          • Kellen November 7, 2011, 11:01 am

            Is it really that early, or have we just made it so? Now, people can’t even decide what they want to do in college and we start telling them “it’s okay, you have 2 years to decide before it’s really an issue…”

            8th graders are probably more capable of thinking about their future than we let them be…

  • Ron @ Besttravelcreditcard.us November 3, 2011, 1:53 pm

    Well another thing to remember is that economic stability is a very important aspect of a nation. When the economic prospects decline for decades the chances of major and rash changes to the system increase. Imo an aspect missing from this discussion is the need to take care of America as a whole, not just individual Americans. The republicans and democrats are both focused on the individual Americans [at least their PR machines are] but we need to remember that the stability of the system is important. We do not want to sacrifice the entire nation that one specific subgroup [ie the ultra poor or the ultra wealth] may be a little better off.

    [by saying this I am by no way approving/disapproving of either side. This is just a comment on the nature of how the discussion has been framed.]

    • retirebyforty November 4, 2011, 9:05 am

      The media and politicians are dividing America into many groups these day. Red states vs blue states, young vs old, city vs rural and many more. It’s difficult to work toward the common good if you are fighting another group. Divide and conquer politic?

  • UltimateSmartMoney November 3, 2011, 4:34 pm

    People needs to pick an industry that pays higher salary and use it to start saving as much as possible. The gap is also caused by those who work hard vs those who are lazy and are not giving their best. It’s our environment that causes this gap. In other country, the culture forces everyone to work hard and thus live a similar lives. Here, there seems to be a bigger gap in terms of how people live.

    • retirebyforty November 4, 2011, 9:10 am

      How about Canada? I don’t think their culture is much different than the US and they score much better on the chart. I doubt other rich countries are much more career oriented than the US. We work more per week than most of these countries on the chart.

  • My University Money November 3, 2011, 5:40 pm

    I’ve seen Brave New Life post an interesting idea on another site. Basically it asked the question of how do we re-distribute money in a fair manner if not through work any longer? The fact is that the job has been the traditional format where people could gain money from wealthier individuals. Today, with automation and outsourcing becoming such widely-used strategies, this is not an effective way to organize society any longer. I like the idea of everyone paying a little more tax (which means that in REAL numbers, the 1% would pay more than everyone else) and us learning to live within our means as we pay down our massive bill!

    • retirebyforty November 4, 2011, 9:13 am

      That’s interesting. I don’t know how we can re-distribute money if not through work and exchange of goods. I don’t think that will change anytime soon though.

  • MR November 4, 2011, 10:47 am

    I don’t like the video. To say “oh this is the reason”… is just a little short sighted. There are too many variable to account for… For example, demographic composition (both Japan and Denmark have a very homogeneous population with respect to demographics) whereas the US is the melting pot.

    I think the speaker was using statistics (and dubious ones that that), to paint his guessing perception of things. I think his stats are a spurious relation. The same as saying it’s hot in summer because more people eat ice cream…

    Ironically, if you go back 50 year to the present, the gap really hasn’t changed that much…

    That said, I would love for CEOs and company executive to get more of their compensation from dividends from stocks instead of a huge dollar amount. This would focus those executives on company earnings, and dividend distributions instead of just getting a set dollar amount. But even if that happen somebody would complain… It’s catch 22 for business people these days.

    The focus should be shifted to labor disparities between the developed counties and developing countries. Even I have a hard time justifying paying a US worker 20 times what it would cost to hire the same quality worker overseas. This is the reason we have such high unemployment, and it will only get worse. This is where the problems exists and where the government (and people) should be focusing their energy.

    Our government is funded by the taxes on the rich, when they are no longer rich and paying taxes, we are all poor and unemployed.

    Patch the holes in our economic boat seems like the best move to me, and that need to be done at the government level, not attacking those that bust their butts to get ahead.

    What is next after the 1%ers? Perhaps 10%ers? Why should they (the top 10%) get so much versus the average middle class person? See how this can get ugly…

    • retirebyforty November 4, 2011, 1:33 pm

      Ironically, if you go back 50 year to the present, the gap really hasn’t changed that much…
      Really? I thought it changed quite a bit since the 70s, but I don’t really know.
      Other studies also have shown correlation between health and inequity. Inequity may not cause the problems, but there is some kind of correlation.
      I like your idea that CEO pay should be tied to dividend. It’s a great idea. That way, the CEO will be more aligned with share holders’ interest.

      • Money Reasons November 4, 2011, 10:36 pm

        I just went out and googled inequality and it looks like the top .01% really does have a big inequality gap afterall. I was looking at data from pre-2005 charts previously.

        That said, I have a hard time believing the inequality and health correlation, there are too many variable to account for (diet, TV, religion and beliefs, different demographics, etc). Guessing, I attribute most health problems to people eating unhealthy snack foods and fast foods instead of healthier kinds of foods like vegetables. People not getting enough exercise, and not working and instead sitting at home watching TV.

        I would like to know what the author claims are the cause of the health differences? To have a solution to a problem without know the real problem seems doomed to fail.

        Very interesting thought-provoking stuff that I will chew on for a while… Presently my experience and what I view as common sense is winning, but I’m open to other arguments though. I’ll research it more and come to a final conclusion later when I have digested all of the facts, claims and my own personal experiences… Thanks

  • Jerry November 4, 2011, 4:04 pm

    VERY interesting article and I do believe that inequality leads to bad health. I think if things start to stabilize in the US it will lower insurance costs and health care costs all around.

  • Kris @ Everyday Tips November 4, 2011, 7:12 pm

    Unfortunately, I couldn’t watch the video on the computer I am using, so I will just have to visualize it. 🙂

    Not sure how they measured ‘social and health problems’, but could the health problems be more because the wealthy probably have a longer health expectancy, which means there will be health problems? Meaning, if I am real wealthy and am 70, chances are, I probably have a health issue of some sort just because of my age?

    My issue with the protestors are many. I grew up in a poor area, and I watched adults in family after family do nothing to improve their situation.

    However,I do know many younger people from where I grew up that did find a way to put themselves through school and become successful adults. Heavily in debt adults because of loans, but still successful. I also saw many immigrants move in to our area growing up and work their heads off and they too were able to move up and out.

    Based on my own personal experience, there is no reason that any able-bodied/minded person in this country cannot find financial success. Relying on someone else’s money makes yourself less accountable, and that is exactly what I think is becoming a major problem in this country.

    There are so many problems in this country that taxing the ‘rich’ more is not going to even come close to solving anything or improving the graphs shown. People need to rely on themselves, be mentored so they can see they can be successful, be provided a good high school education, and learn the basics of personal finance. Just doing those things will do so much more than taxing a subset of people. However, I also think drinking, smoking and gambling also cause a lot of problems, and I don’t know how you eliminate those issues.

    I personally am not willing to give one more dime until the tax code is conmpletely overhauled, because it is a joke now. Taxing the rich is popular because the non-rich far outnumber the rich, and just slapping a higher tax on certain people is a nice, easy way out. Every single day these people protest, they are losing one more day of opportunity to better themselves and/or increase their income. If they put as much effort into those endeavors as they did protesting, we might actually see some real change.

    Sorry for the long comment…

    • retirebyforty November 7, 2011, 11:09 am

      Hope you had the chance to watch the video at some point. I think people can get themselves out of poverty if they work at it as well. It’s just more difficult now than 20 years ago and will get more difficult if the inequality continues.
      Taxing the rich probably won’t make much of a difference. We really need to train the lower 20% for the future jobs.
      Thanks for the long comment. 😉

  • YFS November 5, 2011, 4:58 pm

    Hmm… I believe there is an income gap because as a society as a whole we are getting smarter and faster. In the future there will be no need for a lot of unskilled workers. for example.. we no longer need telephone operators, we need less people building cars, less people building gadgets. So It’s adapt or die. Unless the unskilled worker adapts there will always be a income gap. I unfortunately do not have a solution to this problem.

    • retirebyforty November 7, 2011, 11:11 am

      That’s why the lower 20% needs more training. Education is too expensive here in the US and should be more affordable to lower income people.

  • Nicoleandmaggie November 5, 2011, 5:43 pm

    Hm, it doesn’t look like anybody has mentioned the Whitehall studies yet. You may find these of interest: http://en.wikipedia.org/wiki/Whitehall_Study .

    • retirebyforty November 7, 2011, 11:14 am

      Thanks for the link. Cortisol sounds like a bad thing to have running around in your system all day long.

  • Forest November 8, 2011, 10:41 am

    Nice post. For me I think until the bottom level of society is living in an acceptable comfort the wealth gap is inexcusable. When the safety net of free health care, a roof for people who can’t get one and 3 square meals a day is in place then maybe some portion of society with advanced wealth would be ok. Until then I think it should be evened out somehow…. I’m going to watch that TED video soon, love TED 🙂

    • retirebyforty November 8, 2011, 11:14 am

      Don’t miss the video. TED is a great way to waste my time at work. 😉
      I think basic health care, meals, and a roof should be available to everyone. Ideally there should be opportunities to work for those things for everyone.

      • Forest November 8, 2011, 5:11 pm

        Enjoyed the video a lot and can’t agree more. Money and self absorption becomes less of an issue in a happier society, I think.

  • FitnessTrainer November 21, 2011, 12:09 pm

    Another argument on the correlation between higher-income groups and poorer health outcomes among the richer people is this:

    There is such a thing as too much healthcare. This is when people are overprescribed medications that ultimately lead to other problems — one pills leads to another — and which absolves them of any sense that their lifestyle factors (diet and physical activity) matter.

    I believe this is what is at work in the U.S. today. I base this belief in part from having worked in medical school-based exercise research with older (65+) people, whose medications lists could include a dozen or more prescriptions. We also see it quite prevalent among the approximately 25% of elementary age school children who are on some form of behavior-modification drugs. As a culture, we consistently default to expensive medications in lieu of eating right, getting physical exercise and placing value on personal (i.e., therapeutic) relationships.

    • retirebyforty November 21, 2011, 12:29 pm

      I didn’t know 25% of kids are on some kind of drugs. That’s crazy. We really need to cut down on pharmaceutical and find other alternative. I understand older people needs pills, but kids shouldn’t have to take any medication unless it’s a last resort! Thanks for commenting.

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