An article in yesterday’s New York Times Business section may say it all when it comes to trying to blame Income Inequality for all the ills in the country.
Some smart people would like us to believe that there is a solid causal relationship between income inequality and things like life expectancy and the odds of a poor child climbing out poverty in the future.
But Christopher S. Jencks, a professor of social policy at Harvard, has abandoned his 10-year-old project of writing a book about the consequences of income inequality?
Why would Mr. Jencks do such a thing?
Simply because the hard facts and statistics coming out of Mr. Jencks extensive research just were not proving out basic assumptions of how income inequality was the definite reason for negative effects on the nation’s health, opportunity, and crime.
Basically all the data and research just did not backup the basic assumptions… One problem with these analyses is that they are based on correlations between levels of inequality and variables like life expectancy or the odds of poor children climbing the income ladder. But such correlations can’t prove inequality causes social ills. They can’t disentangle inequality from the myriad things pushing American society this way and that.
Example… Life expectancy in the USA probably lags other developed countries because we don’t have universal government provided healthcare. Until ObamaCare totally clicks in if you are not working at a higher end job you probably don’t have adequate healthcare insurance. And judging from the trouble HealthCare.gove is having with signing people up for the program this problme may go on for many years.
Another example… People in Scandinavia, a country with less income inequality, may have higher upward mobility than the United States because governments in Sweden, Denmark and other Scandinavian countries invest a lot in early childhood education and the United States does not.
Both of these examples could be related to income inequality but there are obviously other factors at play.
Lane Kenworthy a sociologist at the University of Arizona has been researching income inequalities effects and has also been forced to change his tune because he could not find solid correlations.
To try to avoid misleading correlations and find a better way to isolate income inequality’s impact, Mr. Kenworthy studied its evolution over time, comparing how changes in income concentration across the world’s industrialized nations related to changes in a whole set of social and economic outcomes, from growth and employment to health and educational attainment.
What do you think he found?
He came up mostly empty-handed… “My tests suggest it seems to be a small player in the overall story,” Mr Kenworthy said.
Some people might like a simple solutions to the woes that visit upon those that feel they are victims of income inequality. But the answer is not just to redistribute cash from those at the upper end of the spectrum to those at the lower end. Money alone will not solve these problems.
If money was the solution then every single person who has won the lottery would be living wonderful happy lives. But as this article and many others detail, that just is not the case. Divorce, family estrangement, Suicide, murder, kidnapping, poor health, drugs, and alcohol shortened many lottery winners lives. More money may have actually helped these winners lives unravel because as these two income inequality researchers have found… There are other things influencing peoples lives beside money.
What do you think? Can simply putting more money in the hands of people solve the Income Inequality puzzle?