U.S. Income Inequality Relative to Rest of World: Surprise?!

31 Jan

There’s so much (and then some) talk about how the U.S. is the most unequal (in terms of income) of developed countries in the past few months I’ve written about it probably a dozen times already.  Today, I saw something from Marginal Revolution that really puts the argument in a TOTALLY different light than almost everything else I’ve seen on the subject:

Everyone’s been claiming (the list of flapping heads/economists in this group is far too long to name them all) that income inequality in the U.S. is a HUGE terrible problem and its getting much MUCH worse, but this chart shows quite clearly that relative to other countries, income inequality is actually less of a problem in the U.S. and that even the poorest people in the U.S. are MUCH better-off than some of the wealthiest in these countries!

Now, before you jump down my throat, I will acknowledge that this is not necessarily a major surprise as the U.S. is a more advanced and productive economy.  Similarly, if we look at this graph in another generation, the slope of the lines for Brazil/India/China will likely be much flatter due to the productivity gains and the nature of returns of labor, etc.

There are some good comments in the Marginal Revolution thread that are worth reading, I suggest you check them out.



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