Myth: Income inequality is not the cause of this nation's social
problems.
Fact: Studies by Harvard and Berkeley prove the correlation, and strongly suggest causation.
Summary
Poverty is correlated to higher mortality rates for all ages.
Harvard and Berkeley conducted two studies that also found that
income inequality, as opposed to absolute standard of living,
is responsible for higher death rates, as well as numerous other
social problems like crime, welfare, and poor educational outcomes.
Conservatives point out that correlation is not causation; it
could be that people suffering from these health and social problems
naturally earn lower incomes. But economic fluctuations and income
inequality happen too rapidly, drastically and locally to be attributed
to personality changes, which often occur in the same populations.
It is much more reasonable to attribute these economic changes
to changes in economic policy.
Argument
Health researchers have long known that the poor have higher
death rates and greater health problems than the rich. (1) Countless
studies have proven this; the following one yields a typical result.
In 1986, researchers studied two groups of men between the ages
of 25 and 64: those that made less than $9,000 a year, and those
that made more than $25,000. They found that poor white men had
6.7 times the death rate of rich white men, and poor black men
had 5.4 times the death rate of rich black men. (2) One can also
see this correlation in the improving living standards and life
expectancies all around the world in the last 200 years. Better
science, technology, safety, public education and prosperity have
made us all healthier.
But why, even in the same society, would health and life expectancy
be linked to income class? Perhaps the most obvious answer is
that the poor cannot afford the same health care, especially preventative
health care. But in fact there are hundreds of reasons why the
poor have higher rates of death, disease and injury. The poor
live and work in more toxic environments; they have less adequate
diets; they are exposed to greater dangers and risks (both human
and non-human); they cannot afford the safety features or creature
comforts that make living safer or easier; they suffer higher
and more negative forms of stress in trying to make ends meet
(or even survive); and they have less access to education about
things that would prolong their lives.
That, at least, is the mainstream view -- many on the far right
have a much different interpretation. Correlation is not causation,
they point out. Poverty does not cause poor health; rather, poor
health might cause poverty. That is, people in poor health would
probably tend to be society's least productive, and therefore
least-paid, workers. Or yet a third factor could cause both poor
health and poverty. For example, the same lack of education
that ill-informs the poor on health matters also locks them out
of the best paying jobs. Or laziness, substance abuse and other
moral shortcomings could have a depressing effect on both incomes
and health.
Which view is correct? Again, consider the simultaneous rise in
living standards and life expectancies all around the world in
the last 200 years. It would be rather bizarre to attribute this
to a sudden change in individual human morals, habits and work
ethics. Why would this occur simultaneously and coincidentally
in mostly the 10 billion people of the last two centuries? This
sudden upward trend virtually demands a social explanation; it
is not the result of isolated individual behavior. Intrinsic human
nature has not changed for countless thousands of years. What
has changed -- and changed dramatically, especially in the last
two centuries -- is society and its institutions, ranging from
scientific to economic to political systems. Thus, it is far more
reasonable to attribute health and economic advances to social
causes and social programs, not individual personality changes.
To better determine the arrow of causality, let's take a closer
look at how income inequality is linked to health and other social
problems.
The Harvard and Berkeley studies of income inequality
If it is true that poverty kills, then this should place income
inequality in a completely different light. A society that allows
high levels of inequality could be accused of killing its own
citizens. Conservatives defend against this charge by pointing
out that the living standards of the poor have been continually
rising, so it shouldn't matter if the rich are growing even richer
by comparison. After all, this is not a zero-sum economy. Even
a poor person with a small slice of the pie will benefit if the
entire pie grows. This introduces two important concepts to this
debate: relative poverty (or the slice of the pie, as measured
in percent) and absolute poverty (or the actual size of the slice
itself, compared to nothing else).
However, it turns out that relative poverty matters a great deal
after all.
In 1996, Harvard and Berkeley published separate studies that
examined income inequality in all 50 states. (3) According to
Bruce Kennedy, the lead researcher of the Harvard study, "The
size of the gap between the wealthy and less well-off, as distinct
from the absolute standard of living enjoyed by the poor, appears
to be related to mortality." (4) Both studies found that
states with higher income inequality have all the following social
problems:
- Higher death rates for all age groups.
- Higher rates of homicide.
- Higher rates of violent crime.
- Higher costs per person for police protection.
- Higher rates of incarceration.
- Higher rates of unemployment.
- A higher percentage of people receiving income assistance
and food stamps.
- More high-school dropouts.
- Less state funds spent per person on education.
- Fewer books per person in the schools.
- Poorer educational performance, including worse reading skills,
worse math skills.
- Higher infant mortality rates.
- Higher heart disease.
- Higher cancer rates.
- A greater percentage of people without medical insurance.
- A greater proportion of babies born with low birth weight.
- A greater proportion of the population unable to work because
of disabilities.
- A higher proportion of the population using tobacco.
- A higher proportion of the population being sedentary (inactive).
- Higher costs per-person for medical care.
The correlation between income inequality and mortality rates
for all ages was significant. (Berkeley found a correlation of
0.62, with P -- the chance that the correlation could be zero
accidentally -- being less than 0.001; Harvard found a correlation
of 0.54, with P less than 0.05.) (5)
Both studies found that each state's average or median income
did not predict its mortality rate. But inequality turned out
to be a significant predictor, and remained so even after accounting
for such possible confounding factors as smoking and drinking
rates, household size and household income. The last one is especially
important, because it means that the death rate is correlated
not only to absolute poverty, but relative poverty as well.
Dr. George Kaplan, the lead researcher of the Berkeley study,
says: "People might assume that states with higher income
inequality have more poor people, and we know that poor people
have higher death rates. [But] the evidence in these two studies
suggests that the increased death rates in those states are not
due simply to their having more poor people. Income inequality
seems to be increasing mortality rates among nonpoor people as
well, and we are investigating that possibility." (6)
Elsewhere, Kaplan says: "This effect on health wasn't just
happening to poor people; middle-class people were affected too.
When we accounted for income differences, there was still a strong
relationship between income inequality and mortality rates."
(7)
A hypothetical example might best describe these findings. Imagine
an equal society where everyone makes $30,000 a year, and enjoys
a life expectancy of 70 years. Now let's add income inequality
to this society, so that it continues to make as much collectively
as it did before, but a third now make $20,000 a year, a third
$30,000, and a third $40,000. We might expect the average life
span to remain at 70 years, since the shorter life spans of the
poorest group should be offset by the longer life spans of the
richest group. But that is not the case; not only do the poor
lose years, but the middle class as well. The new average life
span of the whole group may be only 67, not 70. We'll explore
some possible explanations for this unexpected result below.
Dr. Kaplan and his colleagues reported that "income inequality
increased in all states except Alaska from 1980 to 1990."
Over the decade, they said, mortality declined in all states (due
to increases in the absolute standard of living), but those with
greater income inequality showed smaller declines in mortality.
(8) If this lends comfort to those who still believe in the "growing
pie" argument, it should be pointed out that inequality still
costs hundreds of thousands of lives per year. Let's consider
just one of the many problems in the above list: coronary
heart disease. The Harvard team concluded that if the U.S. reduced
its Robin Hood index of income inequality from 30 to 25 percent
(about where it is in England), deaths from coronary heart disease
would be reduced by 25 percent. In 1993, the U.S. suffered 489,970
deaths from coronary heart disease; a quarter of that would have
represented 122,493 lives saved for that year alone. (9)
The European evidence
The results of the Harvard and Berkeley studies cohere very
nicely with the international evidence. The U.S. has the most
unequal society of all rich nations, and by far. These other nations
have higher taxes and better-funded social programs to alleviate
poverty, and their progressive social policies have resulted in
more equal societies. So who has the worst health statistics,
mortality rates, crime rates, sedentary lifestyles, economic growth
and other social problems? The U.S., usually by far. (10)
Some conservatives try to nullify this observation by playing
the race card, by pointing out that blacks drag down the U.S.
statistics. However, the U.S. still compares worse to other rich
nations even when blacks are removed from the statistics completely.
What are the causal factors?
Again, correlation is not causation. Which causes which is
a matter of debate. Liberals claim that income inequality causes
higher health and social problems. Conservatives claim that people
who suffer from these social problems naturally earn lower incomes.
Yet another possibility is that both form a vicious circle. Let's
examine each of these possibilities.
Liberals claim that in an interdependent, interlocking society,
the weakening of one sector weakens us all. That would explain
why states with greater inequality have greater health and social
problems not only among the poor, but the middle class as well.
Dr. Kaplan suggests that "income inequality affects all segments
of the population because it affects rates of violence and disability,
as well as public spending on police protection, education, welfare
and health care." (11)
Also, it's likely that average statistics drop in states with
greater inequality because losses among the poor are not fully
compensated by gains among the rich. For example, there might
be a point beyond which having more money does not improve one's
health. If a person already has a full, comprehensive and top-quality
health care plan, then acquiring still more money will not improve
it. It will, however, deprive someone from the lower class of
the health care they would have received otherwise.
The fact that higher death rates creep into the middle class tends
to run counter to the conservative claim that social and health
problems result in lower incomes. If they did, we would not see
these problems growing among those with middle-class incomes.
Furthermore, the historical evidence does not support the suggestion
that low incomes are the result of people suffering from health
problems or personalities which are criminal, addictive, lazy
or hostile to education. The main problem is that fluctuations
in income inequality are too rapid, too drastic and too localized
to be attributed to character changes and social habits in people,
especially when they are the same people. For example, between
1980 and 1990, the Gini index of income inequality rose from .365
to .401. (12) For those familiar with the Gini index, this is
a major jump. Is it really reasonable to believe that the personalities
and morals of the poor worsened considerably in just one decade?
The absurdity of this belief becomes all the more apparent when
you consider the economic changes that occurred to the rich. During
the 80s, the share of national income collected by the top 1 percent
increased from 8 to 12-13 percent, an increase of over 50 percent.
(13) Are we to believe that in just one decade, the personal and
individual productivity, intelligence, education, health, virtue
and work ethic of the top 1 percent grew over 50 percent?
It is much more parsimonious to attribute such rapid economic
changes to the rapidly changing economic policies of the time.
During the 80s, Reagan slashed the top tax rate for personal income
from 70 to 28 percent, allowing income to concentrate among the
wealthy. And in 1983, regressive payroll taxes were raised on
the working poor. Furthermore, between 1980 and 1993, family welfare
payments were reduced from $350 to $261 per month in constant
dollars -- a 25 percent drop. (14) One doesn't have to look far
to find the reasons for growing income inequality during the 80s.
It might be possible that income inequality and social problems
form a vicious circle. No one wants to hire an uneducated person
for a high-paying, high-skilled job. But the lack of a high income
is what prevented that person from acquiring a college education
in the first place. Still, there is nothing about this circle
that is inevitable; it can be broken through social programs,
like student loans and grants.
The argument that income inequality is largely caused by social
policy, not individual merit, is one that has been endlessly developed
in an abundant academic literature. And the implications should
be troubling to every American: our society bears great responsibility
for both its deplorable level of income inequality and poverty-related
mortality.
Return to Overview
Endnotes:
1. George Davey Smith and others, "Socioeconomic Differentials
in Mortality Risk among Men Screened for the Multiple Risk Factor
Intervention Trial: I. White Men," American Journal of
Public Health Vol. 86, No. 4 (April, 1996), pp. 486-496; George
Davey Smith and others, "Socioeconomic Differentials in Mortality
Risk among Men Screened for the Multiple Risk Factor Intervention
Trial: II. Black Men," American Journal of Public Health
Vol. 86, No. 4 (April, 1996), pp. 497-504; Gopal K. Singh and
Stella M. Yu, "US Childhood Mortality, 1950 through 1993:
Trends and Socioeconomic Differentials," American Journal
of Public Health Vol. 86, No. 4 (April, 1996), pp. 505-512;
C. Wayne Sells and Robert Wm. Blum, "Morbidity and Mortality
among US Adolescents: An Overview of Data and Trends," American
Journal of Public Health Vol. 86, No. 4 (April, 1996), pp.
513-519.
2. Robert Pear, "Big Health Gap, Tied to Income, Is Found
in U.S." The New York Times, July 8, 1993, pp. A1.
3. George A. Kaplan and others, "Inequality in income and
mortality in the United States: analysis of mortality and potential
pathways," British Medical Journal Vol. 312 (April
20, 1996), pp. 999-1003. Bruce P. Kennedy and others, "Income
distribution and mortality: cross sectional ecological study of
the Robin Hood index in the United States," British Medical
Journal Vol. 312 (April 20, 1996), pp. 1004-1007.
4. Quoted in Robert Pear, "Researchers Link Income Inequality
to Higher Mortality Rates," New York Times, Friday,
April 19, 1996.
5. British Medical Journal.
6. Quoted in Pear, "Researchers Link Income Inequality to
Higher Mortality Rates."
7. Quoted in Alison Bass, "Income inequality, mortality linked;
Gap found to hurt wide segment in US," The Boston Globe,
April 19, 1996, Friday, City Edition, p. 14.
8. Pear, "Researchers Link Income Inequality to Higher Mortality
Rates."
9. American Heart Association, "Heart and Stroke Facts, 1996
Statistical Supplement."
10. For a comprehensive comparison of the U.S. to other rich nations
on a wide range of issues, see
8Comparison.htm.
11. Quoted in Pear, "Researchers Link Income Inequality to
Higher Mortality Rates."
12. U.S. Bureau of the Census, Current Population Reports,
Series P60.
13. Kevin Phillips, Boiling Point (New York: HarperCollins,
1993), p. 112.
14. AFDC figures from U.S. Social Security Administration. Current
dollars converted to constant 82-84 dollars from CPI-U.