# News Income Inequality Causes Social Unrest?

1. May 2, 2012

### Staff: Mentor

Copied from the OWS May Day protest thread...

This is a very common argument on here and I've seen it in other contexts as well. Usually it is in the context of a larger discussion about income inequality, but it is treated as a self-evident, throw-away claim that doesn't ever get discussed/substantiated on its own. So I'm starting a thread to discuss it on its own:
Vague claims are notoriously difficult to vet, but pending your clarification of timeframe, I'll give it a shot. Income inequality stats are tough to find for after 2005, but here's a close proxy, ending in 2009 or 2010: http://en.wikipedia.org/wiki/File:IncomeInequality7.svg

Notice how income inequality tracks with economic growth, with a major peak in 2000 at the height of the dot-com boom, then a pretty significant drop followed by a gradual rebound up to a new peak in 2007 or 2008 that was only slightly above the one in 2000. As of the last data, we're below the most recent peak and previous peak.

So now the violence increase. Well, near as I can tell, this violence is pretty minor in historical terms. It is nothing like the 1992 LA race riots, for example. Heck, it barely measures-up to a good college sports championship riot. But lets assume it is significant. OWS is only a year-old and is borne of the current economic crisis, which includes very unusually high unemployment and a drop in income inequality. Seems to me like the unemployment would probably have more to do with it than a delayed-reaction to income inequality's peak 4 years ago.

Moreover, the 2000s sharp rise in income inequality is pretty big historically speaking. I don't recall any increase in unrest associated with it (but I do remember people being thrilled by the ultra-low unemployment that went with it), but perhaps you can refresh my memory.
Yes, but that has nothing to do with civil unrest. But when it comes to civil unrest, the OWS protests pale in comparison with economic unrest in places like France and Greece.
Um....not really, no. Even if we set aside the fact that the Russian Revolution overthrew a dictator, not a democracy, following centuries of despotic repression and a tulmultuous insustrialization period, none of which apply to the US today, income inequality in the US is still today below what it was in the decades following the Russian revolution, which was also before the Great Depression and before the US implemented its cradle-to-grave social welfare programs. If the US was ever going to have a Marxist revolution, that was the time. But income inequality dropped substantially leading in to the depression (when the wealth of the rich vanished in the stock market crash), yet a massive social change was still seen as necessary. So my hypothesis is that the depression and its associated high unemployment had more to do with the social change than income inequality, which dropped dramatically right before the social change was implemented.

Last edited: May 2, 2012
2. May 2, 2012

### OmCheeto

I agree with this part. I watched Lifestyles of the Rich and Famous growing up and never felt animosity towards the wealthy. Income inequality is irrelevant, as long as the middle class is happy. Mess with us though, and we start siding with freaks. And the freaks will **** you up. Seen it. Had to be escorted around an incident by a hooker friend of mine about 10 years ago.

3. May 2, 2012

Staff Emeritus
You can look at murder rate vs. gini on gapminder. What you will find is a lot of random motion, but only two cases where they track each other closely: Colombia and Russia.

4. May 2, 2012

### John Creighto

The original post doesn't prove income inequality is irrelevant; instead it in only suggests that it isnt a significant factor at this time and unemployment is a bigger issue. I can buy that. I dispute the statistics linked in the original post but I am not going to try and contest them at this point but may give it a shot on the weekend.

Less and less people are able to support a family on one income. At least that is the impression. Are people delusional or are the statistics most often presented misleading. I suspect some head butting to follow. All, I can say is that less and less people are buying into the legitimacy of the system and if this is a small amount of unrest in historical terms, then feel free to bury your head in the sand. Youll either be right or wrong but let me say the consequences of being wrong are significant.

Well, in spirit I don`t like the precautionary principle, I do know that revolution has been quite a natural phenomenon through history. All I can hope if or when the next one comes that it will be with the minimum of pain and for the best outcome.

5. May 2, 2012

### lisab

Staff Emeritus
I think a bigger cause/predictor of unrest is the (perceived) inability to move up the income ladder. This recession has moved a lot of people down that ladder, and many are afraid they won't be able to get back to where they were.

I don't blame them for thinking that. If you're less than 10 years from retirement age and unemployed, things must look pretty grim.

6. May 3, 2012

### Staff: Mentor

I would have thought it obvious that the extent to which income inequality causes social unrest is dependent on:
• The ratio of poor:middle:rich
• What level of poverty the poorest experience
• The actual or percieved manner in which those with money accumulated it
To expand a bit on those further: income equality between upper and middle class and middle and lower class hardly matters if the vast majority of people are middle class. The second point ties into this a bit with what being poor means in actual terms rather than relative i.e. poor = no new laptop every 6 months vs poor = no food or shelter. Lastly if it is percieved that those who are rich gained it in unfair or immoral ways i.e. an authoritarian aristocracy then the chances of social unrest are increased.

7. May 3, 2012

### Staff: Mentor

Yes, but to put a finer point on it, I think income inequality is a red herring. Whether promoted misleadingly for propaganda purposes, or just misunderstood unintentionally, I think a lot of people just aren't aware of the facts of the issue. So when something bad happens economically (a recession), people latch on to income inequality to complain about, even if it is misdirected anger.
You're right - it is a fact. But it is a fact that cuts both ways: many people are less able to live on a single income because they are living higher lifestyles, buying bigger houses and bigger cars than they used to. So it isn't clear to me if that is a naked negative fact or mostly just a bipriduct of lifestyle choices and not a negative at all.
Well facts are facts. Either this amount of unrest is significant historically or it isn't. I say it isn't, by direct comparison with the level of unrest at other times.

8. May 3, 2012

### Staff: Mentor

Ryan, these all sound logical, but they only are logical if the factual starting premise is accurate and it isn't. They are all based on the same lie that politicians on the left have been feeding us for years: 'The rich get richer while the poor get poorer'. More specifically:
As we discussed in other threads, Eurpoean countries define the classes based on income inequality, a position that American leftists tend to support, but which makes no logical sense. The result is that in a time such as the '90s when income inequality grew quickly everywhere, poverty rates rose despite the people who were being defined as "poor" seeing relatively large income increases and extremely low unemployment. So when people here 'the rich get richer and the poor get poorer' it is true based on popular definitions, but it doesn't correspond to how most of us actually think on a personal level. Most people really don't think that getting a 10% pay raise while their neighber got a 20% pay raise makes them poorer. When they hear 'the rich get richer while the poor get poorer', they think their neighbor saw a 10% pay increase while they saw a 10% decrease. We've seen time and time again on PF that this propaganda works so well that a good fraction of people simply aren't aware of the actual facts.

Thus people are using a twisted, artificial fact to prove a falshood - even without knowing it.
Sure -- but as I showed, that's an inverse relationship with income inequality, not a direct one. So when a recession starts and the poor really are getting poorer, people start focusing on income inequality. I agree that that's what happened here, but it is still misguided if the assumed other half of the coin (the rich get richer) is wrong.
Sure, but again if the rich are losing money, not accumulating it, one would think the result would be less unrest if the corellation were direct. Instead, in both the short (intra-economic cycle) and long (cycle to cycle) term, the corellation is inverted: income inequality rises as poverty and unemployment drop (across the board incomes rise).

I will concede perhaps that some of this is a delayed reaction to what was happening 5 years ago, but few people were complaining about how rich the rich were getting when they themselves were also seeing large raises. There's a hypocrisy in that.

9. May 3, 2012

### Staff: Mentor

Actually it's a bit more complicated than that. It isn't just income or assets but family, education, background, type of employment, use of language etc. It's far more informal today than it used to be but there's a difference between being rich and being upper class for example.

EDIT: Caveat being that this depends on country, Europe is quite diverse.

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10. May 3, 2012

### Jimmy Snyder

There has always been income inequality and there has always been social unrest. Perfect correlation.

11. May 3, 2012

### Staff: Mentor

I think we both may have made a bit of a mess there: Afaik, "poor" has a specific (but inconsistent) definition everywhere while middle class and rich are utterly undefined.

And yes it is probably true that there are nation specific definitions in Europe, but because of the existence of the EU there is also a need for an international standard: the OECD. I'll have to dig up the other thread to be sure, but it was my understanding most adhered to that definition.

12. May 3, 2012

### Staff: Mentor

Hmm in the UK I would be surprised if any official standards were used outside of academia and some politics. In our media (news and entertainment), politics and every day language our definitions of what class you fall into strongly relies on your social status of which money is only a part. For example: a multimillionaire is upper middle class if they are of a background without peerage/gentry and upper class if those are present.

It's not a formal social structure but it is used prolifically in every day and political conversation. This wiki article isn't amazing but it outlines it fairly well
http://en.wikipedia.org/wiki/Social...gdom#Informal_classifications_and_stereotypes

The main take home point here is that what we're talking about in these conversations is class struggle which is quite beyond just income. Even if rhetoric would seem to suggest otherwise.

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13. May 3, 2012

### Staff: Mentor

I assume that was meant to be tongue-in-cheek to highlight the propaganda tactic, which makes it a pretty good point:

Any statement statement of fact can be made sufficiently vague as to simultaneously be both true and false. The beauty of this tactic is that the speaker can convey a falsehood without actually lying. The speaker instead tricks the listener into generating the lie themselves. The difficulty, though, is in trying to be concise without being specific. In my opinion, 'inequality breeds unrest' and its cousin 'the rich get richer while the poor get poorer' cross that fuzzy line between implied lie and actual lie, but either way the intent is deception.

I'll be more specific and perhaps redundant since others have made similar statements: On average, people are poorer now than they were 5 years ago and they're mad about it and they blame various manifestations/incarnations/implications of The Rich. Among those is the incorrect belief that they are poorer because the rich are richer.

Now as per Ryan's point, that doesn't necessarily mean it isn't still [partially] The Rich's fault we're in the mess we're in today, even if it is not well reflected in income statistics. But that's a whole 'nother can of worms, since there is a lot of fault to go around. Certainly, many of The Rich who work on Wall Street bear a significant fraction of the blame since many made bad investment decisions and profited from them, at least in the short term. But equating "bad" with "illegal" or "unethical" is a stretch, particularly since a much, much larger number of people made basically the same bad decisions for similar selfish/short-sighted reasons: those are the millions of people who accepted ill-advised loans to buy houses they couldn't afford. The difference is that while the poor person's share of the responsibility is mostly personal/individual (affecting only themselves directly, but millions very indirectly), the Rich Banker's responsibility is systemic (affecting thousands directly and millions indirectly).

Still, whether the point is an impersonal corellation (the rich get richer while the poor get poorer) or a personal blame (we're in this mess because the rich screwed-up -- while profiting from it), both forumlations are at best highly misleading and overly simplistic.

However, while the conceptualization of the economic conditions that are said to cause unrest are both wrong and wildly different from historical examples, what does remain constant over time is that propaganda is key. Ultimately it doesn't matter what is true: what matters is what you can make people believe is true. And in the class war, the Left is winning that propaganda battle.

14. May 3, 2012

### Staff: Mentor

Hmm...well, good point though I think the conclusion is backwards because of your UK perspective: Since the US doesn't have aristocracy, class is strictly an economic issue. Even still, in the UK is there much real non-economic class struggle? I've never noticed the issue being brought up wrt the current economic situation....though news from the UK has been thin since you' come through without too much pain.

15. May 3, 2012

### D H

Staff Emeritus
Since the current income and wealth gaps are historically high, you do have to go back to completely different times to find analogs. You certainly won't see it by going back to the 1950s. Those gaps were at historical lows (and the top marginal tax rate, over 90%, was near its historical high) throughout the 1950s.

To see a comparable gap you have to go back to the Gilded Age or the Roaring 20s. There was violence then, much more so than the current tepid OWS stuff, even with May 1. The Wobblies were pretty dang violent, and so were the thugs hired to keep the nascent unions at bay. The US managed to avoid the more severe, sometimes revolutionary, problems that occurred elsewhere by reforming itself. My thoughts on FDR: While none of his efforts "cured" the depression (it took WWII to make that happen), his efforts did keep us from going down a road nobody would want to be on.

16. May 3, 2012

### Staff: Mentor

Good point; I'd focused on one half of the issue (the violence) when looking back and not looked at the other (the inequality) in the same way. And you're correct: once you get past the steep rise in the '90s, with its peak in 2000, you have to go back 80 years to see similar inequality levels in the US. Still, OWS is pretty single-minded in its 1% vs 99% message - even if that masks the real problems - whereas when you look back at the depression and earlier, there were a bunch of real problems related to industrialization's growing pains.

So I think it would be a vast oversimplification to say that the social unrest of the '30s was primarily due to income inequality.... or perhaps we have to flip it: Life was truly awful for the new city-dwelling factory-working class in the '20s. So at the time, you might accurately say, inequality meant poor living conditions for some and good living conditions for others. Today, however, inequality means good living conditions for some and great living conditions for others. So the reason why the social unrest was vastly worse back then than today isn't because of what is the same (high inequality), it is because of what is different: worse living conditions.

17. May 4, 2012

### Bobbywhy

Yes, income inequality is one cause of social unrest. The U. S. maldistribution of wealth, in which an enormous segment of the population struggles while the fortunate few ride the gravy train, is a world-class recipe for social unrest. Income inequality in the United States is higher than in any other advanced industrial democracy and is nearly the same as that in Ghana, Nicaragua, and Turkmenistan. The concentration of wealth in the hands of a few has been called “unsustainable” and “incompatible with real democracy”. It divides us from one another in nearly every aspect of our lives. I agree that this great imbalance is dangerous to our national interest and must be readjusted.

Another cause of social unrest is high long-term unemployment. When a person is out of work for over one year she begins to lose her self-esteem and is often discriminated against by potential employers. This is highly demoralizing. Highly educated workers forced into taking menial jobs are really stagnant human capital and represent stagnant social mobility. The American promise of equality of opportunity seems just a dream to those underemployed.

But there is a long list of additional factors in the U. S. today that contribute to instability. One is the resentment and mistrust between the “haves and have nots”. The percentage of families in “poverty” today is higher than ever. The search for scapegoats is a common reaction to systemic problems in a society. Some even begin to blame certain religious groups, immigrants, or other nationalities.

There is a huge imbalance in political power today where rich individuals and corporations support the reelections of congressmen who vote for laws favorable to those special interests, resulting in “the rich get richer…” There is a sense throughout our country that our lawmaking system is completely dysfunctional. One political party proposes a measure “in the national interest” and the opposing party refuses to even consider agreeing to it. This becomes a deadlock where nothing gets done-right or wrong. And many believe lawmakers are only voting to satisfy their rich benefactors. This political deadlock causes the people to have feelings of frustration, depression, helplessness, and even anger. Demagogues feel rewarded when they discredit those clamoring for reform, causing further divisions in our society. This great maldistribution of wealth undermines our democracy.

It seems a mistake, however, to equate social unrest with violence because it is quite possible have social unrest without violence.

18. May 4, 2012

### Staff: Mentor

False premises lead to erroneous conclusions.

Also false.

These are what I'm talking about when I say that left propaganda has done a fabulous job of convincing people of supposed economic realities that are factually wrong. So what's true is this:

Absent intra-cycle fluctuations in which every income segment sees drops and the occasional big cycle swamping the previous (ie, what we are seeing now), incomes for every income segment have been increasing for many decades and the poverty rate decreased accordingly. However, since income gains in the lower end are slower than the others, it has been about 40 years since we've seen a sustained, long-term drop. Ie, in 1959, poverty was 22%, by 1970, it was 12% and since then it has been oscillating up and down with the cycles, between 11% and 16%. http://en.wikipedia.org/wiki/File:US_poverty_rate_timeline.gif

Note that the US definition of poverty and its poverty line are based on individual standard of living and on an increasing scale, so while we can say that the poverty rate has stagnated for 40 years, we can also say that the standard of living at the poverty line has increased.

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19. May 4, 2012

### mege

So where have those high-skill jobs gone and why are they being replaced (at least in theory) by low-skill/low-pay jobs?

20. May 4, 2012

### mheslep

Brooking's has had a well regarded study out for some time showing that if a US resident meets the following conditions the odds of joining the middle class are greater than 75% , i.e. mean income \$50K/year.
1. Graduate high school (or get the GED?)
2. Get married
3. Don't have children before you get married.
(BTW, re an earlier post, one of many differences between US society and czarist Russia was that no matter what actions he took Ivan the Serf was not going to join any higher classes, ever).

This suggests to a great extent growing income inequality is a result of the change in culture or collapse in institutions that previously mandated these tenets. Charles Murray's recent book, "Coming Apart", attaches a narrative (on my list). In part he claims that the residents of blue collar and wealthier neighborhoods made many of the same personal mistakes in the past decades, but the the consequences for the former have been severe, with no slack to recover. Hence the latter can afford to hang out an OWS site for weeks and get arrested a few times and afterword go to work for a nice foundation somewhere. Not so the former.

http://global.nationalreview.com/images/cartoon_120211_A.jpg [Broken]

Murray:

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