Uneven wealth distribution affects more than just income

By Maria Castellucci Opinions Editor

Mohamed El-Erian, former CEO of Pacific Investment Management Company, a global investment management firm, gained notoriety after a blog post went viral last week where he admitted the reason he quit his job last January was because his 10-year-old daughter presented him with a list of 22 events he missed in her life.

Commentators praised El-Erian for quitting his high-profile job to spend more quality time with his child, but what El-Erian and commentators neglected to mention is that he reportedly made $100 million in 2011, allowing him the financial stability most people do not have to quit their jobs.

Many CEOs have recently spoken publicly about the high stakes and pressures of their jobs, including Max Schireson, former CEO of MongoDB, a database company. Schireson also quit his job in August because he regretted missing time with his children, according to an Aug. 4 blog post on his website.

Although these men are being viewed as selfless, overworked fathers by the media, what is being overlooked is that they remain millionaires and left their positions with financial security.

This is a luxury only a fraction of Americans can afford, and recent reports have shown the percentage is continuously shrinking. A 2013 study from the University of California, Berkeley found that wealth inequality is at its highest rate since 1928, with 10 percent of the U.S. population accounting for 48 percent of the wealth.

While most wealthy have secure retirement plans, 37 percent of middle-class Americans think they will work until they are too sick or until they die, according to an Oct. 23, 2013, Wells Fargo study. The report also found that 42 percent of middle-class individuals say both paying bills and saving for retirement is impossible.

The disproportionate division of wealth in our society impedes economic growth and perpetuates poverty. Supporting legislation that creates equality, like higher taxes among the rich and raising the minimum wage, can help alleviate the growing inequality and crippled economy.

Multiple studies have found that Americans do not support the uneven distribution of wealth, preferring more egalitarian economies such as the system followed in Sweden. A 2011 study from the Association for Psychological Science created unlabeled pie charts of distribution of wealth in America and Sweden and found that 92 percent of American respondents preferred Sweden’s egalitarian distribution.

Despite the clear dissatisfaction regarding wealth distribution in the U.S., raising taxes among the rich remains a measure with substantial pushback from the right wing in Congress. However, an Aug. 27, 2012, study by the Pew Research Center found that 58 percent of respondents agreed the rich pay too little in taxes and should be more heavily taxed.

As minimum wage workers continue to demand higher wages, there has also been an attack on the middle class. According to an Aug. 22, 2012 Pew Research Center report, the middle class has continued to shrink in recent years. The study found that 85 percent of middle-class Americans said it was more difficult now to maintain their standard of living than it was 10 years ago. Although the middle class is essential to a functional society because they promote capital and contribute to economic growth, it is being lost.

The middle and lower classes are also experiencing more stress. According to the Pew Research Center report, only 27 percent of upper class Americans experience stress, compared to 37 percent of those in the middle class and 58 percent of lower-class individuals. High levels of stress are known to cause health issues such as high blood pressure. It can also increase risk for diseases like obesity, depression and heart disease.

Upper-class Americans are also shown to live longer than their lower- and middle-class counterparts. The U.S. Department of Health and Human Services found in a 2008 report that although life expectancy is increasing in American population overall, the largest gains of life expectancy occurred in the upper- class population. The study found it was likely because upper-class individuals have access to better medical care and are more likely to have health insurance than those in the lower class.

A 2011 book by Richard G. Wilkinson and Kate Pickett, “The Spirit Level: Why Greater Equality Makes Societies Stronger,” points to high rates of mental illness and drug and substance abuse as a result of uneven wealth distribution, according to a Sept. 8, 2010 Huffington Post political blog. The book details how illness, lower education and high crime rates are present in both the lower and middle classes.

Uneven wealth distribution affects the well-being of citizens. Politicians should seriously consider changing policies to support more equal wealth distribution because it can strengthen American life.