Inequality in America: Gini in the bottle

THE most revealing graph in a recent New Yorker post on inequality in America is this one:

The figure and its data come from Janet Gornick, the director of a CUNY research centre on international inequality. The dark-blue lines tell a now-familiar tale: America boasts the highest post-tax-and-transfer income inequality of any highly developed country in the world. The metric at play is a number between 0 and 1 known as the Gini coefficient. In a hypothetical country with a coefficient of 0, everyone has exactly the same income, while a nation with a coefficient of 1.0 is home to one fat cat who takes everything while everyone else earns nil. At 0.42, America’s level of post-tax-and-transfer inequality outranks Israel, Britain and Canada, and dwarfs the figures in Japan and Scandinavia.Ms Gornick’s light-blue lines reveal a less well-reported story. Those lines show pre-tax-and-transfer income inequality, and on that count America doesn’t fare badly in comparison to other OECD countries. At 0.57, America is neck-and-neck with Spain and every Scandinavian nation, and less unequal than Britain, Greece and Ireland. But the American taxation and welfare state clips only 0.15 off of the pre-tax-and-transfer Gini coefficient, while more aggressively egalitarian countries slice off 0.20 (Luxembourg, Norway), 0.24 (Germany, the Netherlands, Sweden) or 0.28 …

Link to article: www.economist.com/blogs/democracyinamerica/2013/11/inequality-america?fsrc=rss

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