Do people mind more about inequality than poverty? [1] from Matt Ridley at his blog The Rational Optimist
Excerpt:
If you measure consumption inequality, it is far lower than pre-tax income inequality, because the top 40 per cent of earners pay more in than they get out, while the bottom 60 per cent get more out than they pay in. Indeed, in Britain the top 1 per cent generate about 30 per cent of the total income-tax haul. After such redistribution, the richest fifth of the population has only four times [2] as much money to play with as the poorest fifth.
With big increases in housing benefit and other redistributions, consumption inequality may be as low [3] as it has ever been. Add in the value of pensions (including the state pension), free healthcare, the fall in the price of food and clothing relative to wages, plus the dramatic fall in the cost of much technology and it is clear that for most basic needs, the country has never been less poor or less unequal. A smartphone’s search engine may be about as capable as a plutocrat’s full-time secretary was in 1960.
Imagine being told that one of the people in a meeting is a genuine billionaire (I owe this idea to Professor Don Boudreaux [4]). How would you tell which one? His bodyguards, private jets and grouse moors are outside the room; his shirt and jeans are unlikely to give him away (as they would in 1900); his Rolex could be a cheap imitation; his teeth, girth and height are probably unremarkable (unlike in 1800); even his Diet Coke is the same as everybody else’s. Much more than in the past, most inequality in this country these days — though by no means all — is in luxuries, rather than necessities.
HKO
Measurements of inequality are not always indicative of the truly experienced equality. Making the rich poorer does not inevitably make the poor richer.Income is only one measure of the wealth of any class. The quality of consumption is missed by much of the data.
Inequality occupies the minds of the elite and the academics. Most people at the low end of the scale just wants to improve their lot in life. That is more important than how well others are doing. Other than the new political elite who get massive checks from their crony relationships with the government, few people who depend on government subsistence will ever get enough of it to escape poverty.