Income inequality in the U.S. rivals that of developing nations

Bridgeport, Ct. and Bangkok, Thailand have more in common economically than you might think

Topics: GlobalPost, Thailand, Bangkok, Bridgeport, Connecticut, Income inequality

Income inequality in the U.S. rivals that of developing nations (Credit: ventdusud via Shutterstock)
This article originally appeared on GlobalPost.

Global Post

The distance from Bridgeport, Connecticut to  Bangkok, Thailand is 8,639 miles. But then, it depends what one means by the word “distance.”As we discovered in the first installment of this GlobalPost Special Report, by some measures there is not much distance at all.

Take the Gini Index, the scale that economists use to measure income equality, with zero equaling perfect equality and 1 representing absolute inequality in which one person owns everything. Thailand, where Bangkok is the bustling capital city of one of Southeast Asia’s fast growing “Tiger economies,” comes in at .536. The Bridgeport area — Fairfield County — is slightly worse at .539. The two places fall very close in their ranking on the Gini Index as highly unequal.

Put more simply, these are cities where you can move, often within minutes, between the wrenching poverty of the dispossessed and the opulence of the super-rich. The physical distance between rich and poor in these places is small. But for the people who live in Bangkok and Bridgeport, traveling from the lower economic rungs to the higher ones is extremely difficult.

That has long been true in the developing world. And in America, which has long lived with the idea of mobility and a belief that all have a shot at the American Dream, it is increasingly difficult, as new economic research reveals.

To explore these issues of global income inequality and its cost, GlobalPost begins today a series of reports by more than 20 reporters, photographers and videographers from every corner of the world. The result of more than six months of reporting and data analysis, the Special Report seeks to match and compare American metropolitan areas with foreign countries that have similar levels of income inequality.

For me, the assignment was to return home to Fairfield Country, Connecticut, where I grew up, and explore how the death of industry in Bridgeport has cost good jobs and how US government tax policy over at least two decades has favored the rich, particularly hedge fund managers in the tony town of Greenwich. The result has been vast income inequality.

On the other side of the world, GlobalPost senior correspondent Patrick Winn explored Bangkok with its similar level of income inequality in the Gini Index. Winn has lived and worked in Bangkok for the last four years, and his reporting for this project takes readers from the city’s infamous slums to its equally infamous glitzy shopping district where the rich search out world-class bargains on Gucci and Prada.

The journey between Bridgeport and Bangkok was captured in a GlobalPost Special Report video segment titled “The Distance Between Rich and Poor.” It was shot by the award-winning photojournalist Ed Kashi who followed Winn and me through the cities we consider our own.

In both of these places, the top 5 percent of the population controls over 60 percent of income. That translates, in Bridgeport’s case, to a median income for that top 5 percent of over $685,000 a year, while the bottom 20 percent, clustered primarily in dismal slums like Bridgeport’s East End, take home about $15,000, US Census bureau figures show.

For those who live on either side of this divide — in either country — there is a profound lack of identification with the other world. A profound distance. “I don’t think of it [Bridgeport] at all,” said Karen Schiff, a well-dressed young woman heading home from Greenwich train station from her job in New York. “I don’t think I’ve ever even met someone from there — maybe I drove through, I don’t know.”

Clara Bing, a Bridgeport native who commutes to affluent Greenwich each day to work at a dry cleaning business, said she is not surprised people feel little responsibility for their poorer neighbors. “As long as we go home at night, I guess, it’s okay. It’s like we’re invisible,” she said.

Vast economic disparity is often associated with developing nations sacrificing social goals in order to emphasize growth and move up in global rankings. In Thailand, the boom years of the 1980s and 1990s saw Thailand’s per capita income — the average annual pay a person takes home — soar from $680 to nearly $5,000, making it an “upper middle income” country in the parlance of global development experts.

Thailand has 47,000 millionaires today, many of them holding the reigns of political power. The concentration of wealth in the hands of a few has touched off a backlash. The so-called “Red Shirt” movement has clashed violently with government forces, contending that the poor are deliberately exploited by a corrupt elite. Its rallies have calmed of late, but outrage over song matratan — i.e. “double standards” — is now a feature of the Thai political debate.

In America, such disparities evoke memories of the so-called “Gilded Age,” the period between the 1880s and 1920s of westward expansion, massive immigration and tycoons like Andrew Carnegie, J.P. Morgan and John D. Rockefeller. The great divide of that age, with its strikebreaking massacres, slum epidemics and child labor, launched the career of Republican Teddy Roosevelt’s progressive reform movement and, after the Great Depression a generation later, his Democratic cousin Franklin Delano’s New Deal.

Income disparity dropped markedly during the years that followed World War II, only to begin widening again about 1968. Until the 2008 financial crisis, the stagnation of middle and lower class incomes in the US were masked by asset bubbles and cheap credit. Only recently, as the housing collapse and banking crisis pulled back the curtains, has income disparity become a topic for polite conversation in US political campaigns.

“We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by,” said President Obama in his 2012 State of the Union address. “Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules.”

It’s not always so polite, of course. Two very different political movements, the Tea Party and Occupy Wall Street, both sprung up, in part, out of anger over the stagnating prospects of the US middle class. The Tea Party stresses “inequality of opportunity” and believes pro-growth policies and an unbridled free markets will lift all boats. The left sees that as discredited and wants a tax code that reverses the inequality gap.

The focus on growth has come under new pressure from studies showing that America’s vaunted ability to create pathways to success may be flagging. Multiple studies, most recently by the Pew Center for the States, show that those born poor or in the lower middle class in America are far less likely than popularly imagined to “make it.” “Only 4 percent of those raised in the bottom quintile make it all the way to the top as adults, confirming that the ‘rags-to-riches’ story is more often found in Hollywood than in reality,” the report said.

The study found that richer people have a greater chance of moving up in American society, but that the vast majority will remain in the same income category. With studies challenging such a central component of the American Dream as social mobility, experts say, it should not be surprising that people are angry.

“Workers’ share of the pie is falling with inequality reaching levels similar to 100 years ago,” said Harvard economist Kenneth Rogoff, co-author of what many believe to be the definitive book on the 2008 crisis. “The status quo has to be vulnerable.”

 

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