Wednesday, January 29, 2014

Inequality v. disparity

The phrase income inequality — a phrase not in the State of the Union address, but a phrase that is everywhere in commentary on that address — makes me uneasy. In a capitalist economy, what could be the alternative to income inequality? People earn more or less, for many reasons. And indeed, some of those reasons are a matter of injustices woven deep into American life. But income, unlike rights, cannot be distributed equally to all.

Equal pay for equal work? Of course. But the phrase income inequality points to a larger matter: the great gap between the wealthiest Americans and everyone else. The problem there is not income inequality: it is income disparity.

A related post
Income disparity in higher ed

comments: 7

The Arthurian said...

Good post.

Some people specify "the extreme inequality" of recent times, trying to reach your "disparity".

It's important, because it's hard enough to achieve economic goals when they are clearly defined. Harder when not.

Michael Leddy said...

Thanks, Arthurian.

Anonymous said...

It is an interesting exchange of one word for another. Oddly neither word fits into an equation nor can be keyed in to a calculator to do the math. As Arthurian noted, "it's hard enough toe achieve economic goals when clearly defined." To what rational number or numeric value is the ratio named disparity equal, so that one may begin to calculate the outcome for policy decisions? Without a number, a solution is definitely not calculable.

Michael Leddy said...

I cited Peter Drucker’s ratio of 20:1 (highest-paid to lowest-paid person in a company) in a previous post. Executives willing to cap their own pay could make that happen.

A substantial hike in the minimum wage would also help greatly.

Anonymous said...

I argue for equal pay for all, irrespective of the type of work, but based perhaps solely on hours per week actually worked. This would be true economic equality. You would receive the same as your college president, and both of you the same as the coaches and custodians. This is equality, while suggesting some might be willing to "cap their own pay" seems like no policy at all, but rather merely a call for voluntary compliance, something that has never worked on the highways as regards speeding, overeating at a buffet or such as alcohol consumption.

JuliaR said...

You might be interested in some of Philippe Van Parijs's work, about basic income. You could search the journals at your university library for his name as author. One article was titled "Why surfers should be fed".

Anonymous said...

Philippe Van Parijs writes, "When receiving one's basic income (pitched at an appropriate level) , one is not taking unfair advantage of others, because one is getting a share than is no larger than what others get in what is there for all to share. When receiving in addition the benefit of a public good which some others are producing, one may well be taking unfair advantage of others." All very clear, but it does not answer the notion of inequality or the new word, disparity. All those with income above the "basic" must at some level be viewed in some social manner, whether progressive income tax which other says is unfair, to Drucker-like ratios which limit the top "basic" rich income. For all the clever words, the question returns to numbers to put into a calculator to come up with whatever it is that "equality" is to differentiate it from "inequality." Everyone seems to love the words, but hates the ratio when it doesn't justify their relative income that is above the median for their society. So feed the idle surfer who refuses to work? Even Jesus, Lincoln and Lenin thought that silly.