The Spiritual Impact of Inequality

Words of Rev. Mark Morrison-Reed, from the back of our hymnal:

"The central task of the religious community is to unveil the bonds that bind each to all. There is a connectedness, a relationship discovered amid the particulars of our own lives and the lives of others. Once felt, it inspires us to act for justice. It is the church that assures us that we are not struggling for justice on our own, but as members of a larger community. The religious community is essential, for alone our vision is too narrow to see all that must be seen, and our strength too limited to do all that must be done. Together, our vision widens and our strength is renewed."

So let us unveil those bonds that do connect us – and together let our vision widen and our strength be renewed. We live in a time of great polarization – and the political polarization is itself an outcome of the income and wealth inequality.

On November 2, 1980, my daughter Morgen was born. She was born into a country that certainly had poverty, but did not see the sort of wealth disparities we have now. Two days after she was born there was the 1980 presidential election, and Ronald Reagan won it. Morgen turned 43 last November, and over the course of her life so far there’s been a massive transfer of wealth to the wealthy.

In 1979, the poorer half earned 20% of the nation’s pre-tax income. By 2014, just 13%. If the US had the same income distribution it had in 1979, each family in the bottom 80% of the income distribution would have $11,000 more per year in income.

From 1947 to 1979, we all grew. In those 32 years:

• For the bottom 20%, income rose 116%.
• For the second quintile, income rose 100%.
• For the middle quintile, income rose 111%
• For the fourth quintile, income rose 114%.
• For the top 20%, income rose 99%.

So: all quintiles rose a comparable amount – but the bottom 20%, by a small margin, grew most of all. And the top top 20%, by a small margin, grew least of all. That was during the 32 years from 1947 to 1979. But from 1979 to 2007, it was a completely different story. In those 28 years:

• For the bottom 20%, income rose 15%.
• For the second quintile, income rose 22%.
• For the middle quintile, income rose 23%.
• For the fourth quintile, income rose 33%.
• For the top 20%, income rose 95%.

In 1980, the richest one percent of people got eight percent of the income -- which means they were getting eight times the mean income. Eight times the mean income would seem to be plenty. Who could want more than that? Surely that’s more than enough. But in 2011, the richest one percent brought home 20 percent of all income -- 20 times the mean.

"During the 1950s and 60s, CEOs of major American companies took home about 25 to 30 times the wages of the typical worker. In 1980, the big-company CEO took home roughly 40 times. By 1990 it was 100 times. By 2007, CEO pay packages had ballooned to about 350 times what the typical worker earned.” (Robert Reich, Forward to Wilkinson and Pickett, The Spirit Level: Why Greater Equality Makes Societies Stronger.)

Modern life is tough. Living the way we do is hard on people: anxiety, depression, unsure friendship, consumerism, lack of community. Not all of that would go away if suddenly, magically tomorrow all income and wealth distribution were at 1979 proportions again. Now, I need to say that I’m always suspicious of any scenario invoked with “if suddenly, magically tomorrow” – because there are no magic wands, and HOW we get somewhere is always going to be a huge part of what it means to be there. So what would it take? It would take some massive programs to create more jobs, bills to ensure that they paid well, lots of aid and assistance, like what we saw during the pandemic, only more – and to pay for it all, a progressive income tax of the likes we had in this country in the 1950s.

The top marginal tax rate is now 37% It’s been in the 30s – or even briefly as low as 28% -- ever since the Reagan administration. But back during the top marginal tax rate was 92% -- then in came down to 91% and stayed there through 1963. In 1963, for a single filer, any income above $200,000 was taxed at a 91% rate. That was 60 years ago, and general cost of living then was about a tenth of what it is today, so $200,000 then was about equivalent to $2 million now. Imagine taxing all income above $2 million at 91%. What’s actually much harder to imagine is our congress approving such a change. It would take a huge and drastic popular movement that voted into office very different representatives than we have now. The building of that movement would involve substantial attitude shifts in a lot of people. It would take a moral awakening of mass numbers of people to really care about the well-being of everyone. And if THAT happened, we’d already be in a very different world, quite apart from the effects of the legislation we would then be able to pass. Just living in a world where most people really cared about the well-being of all people would itself go a long way to easing the anomies of modern life: anxiety, depression, unsure friendship, consumerism, lack of community.

The state of huge disparities of income – and the even huger disparities of wealth – make everything that’s tough about modern life is worse. What may be an even bigger factor is the practical political reality that we live in a country that allowed this to happen, that has been voting into office the leaders that made it happen ever since my daughter was born. We live in a country that is largely unmotivated to rectify it. I, for one, veer between anger and sadness at this reality.

There are a lot of different ways to measure inequality: the top X percent versus the bottom Y percent. But any X or Y we might choose reveals about the same trends, and about the same differences between nations. One common metric, which I will highlight because the UN uses it, is the ratio of the income at the 80th percentile to the income that’s at the 20th percentile. This 80th to 20th ratio is, in the US, as of 2022, at 8.6. It’s been running at about that for over a decade, though during the pandemic we had a temporary drop down to 7.1. Canada, Japan, and most of Europe are below 5. When this 80th percentile to 20th percentile ratio is less than 5, then we find a society generally maintaining some shared assumptions about wealth and about each other. Roughly, when that ratio is about 5 or less, the attitude of the populace will resemble something like this:

“If there are somewhat wealthier folks among us, that’s OK. I can accept that some people are luckier, or more skillful at work that society prizes, or they’re more driven to work hard, and they end up wealthier. That’s fine – and as it should be. The relatively wealthy serve as a reminder to me of what good schooling and hard work and a little luck might make available to my children. If the town doctor has a big house on a hill, that’s OK – ze’s smart and had a lot of training, and ze’s using that to help us when we get sick, so more power to zir. Maybe my kid can get a scholarship and be a doctor.”

That kind of thinking was still pretty much the largely-unspoken norm on the day 43 years ago when I first held my newborn daughter in my arms. But that attitude loses purchase, begins to slip away, if the rich-poor gap grows too large. That outlook that prevailed through my growing up and my parents lives up until 1980, has now come to seem quaint -- an echo of a bygone time. Few, it seems, think like that anymore.

Things changed during the time of my daughter’s growing up. The two key features of the old outlook were:

1. the higher levels of wealth were attainable by those who weren't already rich; and
2. those who had wealth deserved it.

These two features are connected, for when upper-class wealth seems attainable – when the perception of most people is that anyone with the right combination of talent, drive, and luck can become upper-class – then those who do make it to society’s top wealth echelons are presumed to deserve it. But when the gap becomes as enormous as it has in the US, the folks at the bottom and middle can no longer see the wealth of the ones at the top as either attainable or deserved.

By the time my little girl was graduating from college in 2002, the world she was commencing into had become profoundly different from the one she was born into. The country had become a place where we could no longer feel we were all in this together.

Now, I know that the idea that there once was, up until 1980, a halcyon time of general social solidarity overlooks the deep racism that has divided our country throughout its history. I know that, given the horrors of Jim Crow segregation, gauzy nostalgic impressions of togetherness are delusional. Even so, whites could see rich whites as attainable, and blacks could see wealthier blacks as attainable. But in this century, even that has fallen apart.

There is an argument that we should be concerned with poverty, but not with inequality. It’s our business as a society to make sure that everybody has enough, this argument goes, but not our business how much more than enough the rich have. Here’s the thing, though. What we want is to care and be cared for. We want, and need, to be in relations of mutual care. And when that need is not met, it makes anxiety, depression, and social alienation more likely. Societally, when inequality becomes great, we lose the sense of community, lose the sense that we’re all in this together.

Researchers into “social health” typically measure it as an amalgam of ten factors. The lower the rates of:

• homicides
• obesity
• teenage births
• infant mortality
• imprisonment rates
• mental illness (including drug and alcohol addiction),

and the higher the:

• life expectancy
• children’s educational performance
• social mobility
• level of trust

then the higher a nation's social health.

Using this definition of social health, researchers have then found that a country’s wealth does not correlate with its social health. A country may be rich, medium, poor, or extremely poor (less than $10,000 per person per year). Except in extremely poor nations, more wealth has no effect on social health. Equality, however, does correlate with social health. Countries with high inequality, whether rich or poor, have low social health. Countries with low inequality, whether rich or poor, have high social health. The US is quite wealthy, but on the measure of social health we’re doing worse than most countries that have only half that much per-person income. After meeting a certain minimum, more wealth doesn’t do us any good. Equality does. In statisticians' terms, the mean income, as long as it’s above $10,000, doesn’t matter. It’s the standard deviation that matters.

Social health means a better quality of life for all of us. Richard Wilkinson and Kate Pickett write in their book: The Spirit Level: Why Greater Equality Makes Societies Stronger

“The evidence shows that reducing inequality is the best way of improving the quality of the social environment, and so the real quality of life, for all of us . . . this includes the better off.”

A relatively equal society – where the ratio of the 80th percentile to the 20th percentile is less than 5 -- can sustain a shared understanding among its members. But if, as in the U.S., that ratio is close to 9, there’s a disconnect. We lose the shared understanding of the legitimacy of things. The wealthy are beyond attainability, and beyond any credible story of deservingness. We lose the sense that we’re in this together. The wealthy become “them.” And "they" don’t care about "us" -- so we don’t care about them. Anomie and division set in; anger and alienation become the social mood. Sensing the resentment of most of society, the wealthy, in turn, retreat behind gated communities, which further increases the disconnect.

We begin to believe the game is rigged; we don’t have a chance. When we believe that, we become more likely to behave in ways that make that a self-fulfilling prophecy. Rich and poor alike feel the division, the disconnect. The result is that phenomenon I mentioned: everything that’s tough about modern life is exacerbated. Higher levels of depression, higher levels of consuming things that aren’t good for us: from drugs to alcohol to junk food to mindless TV shows to mindless consumer products. As I wrote in my column in this month’s issue of Connecting: When you compare nation to nation, there’s no correlation between wealth and life expectancy or mortality. No correlation. Rich countries have about the same life expectancies and mortality rates as relatively poor countries, until you get into the really poor end of the spectrum. As long as a nation has per-person income above about $10,000 a year, further increases do nothing to increase life expectancy. That’s the nation-to-nation comparison.

But when we do a zip-code-to-zip-code comparison, we get a different picture. The poorer zip codes have higher mortality than the richer zip codes. If you took several of the poorest zip codes, created a new island in the Pacific, put them all there, maintained their per-person incomes as they were, made a new island nation of them, they’d have decreased mortality. They’d be fine. But because they live near the wealthier areas, they perceive that difference. They see all around them the inescapable fact that they live in a society that is set up to work for others, but not for them. They are reminded daily that they are not in a society of mutual care. And THAT wears them down much more than relative material deprivation.

Wilkinson and Pickett write:

“At the pinnacle of human material and technical achievement, we find ourselves anxiety-ridden, prone to depression, worried about how others see us, unsure of our friendships, driven to consume, and with little or no community life.”

Wilkinson and Pickett go on to note:

“The unease we feel about the loss of social values and the way we are drawn into the pursuit of material gain is often experienced as if it were a purely private ambivalence which cuts us off from others....As voters, we have lost sight of any collective belief that society could be different. Instead of a better society, the only thing almost everyone strives for is to better their own position – as individuals – within the existing society.”

A complex web of interrelated factors has brought us to this pass, and growing income inequality is a key node within that web. It fosters the sense of divide. If we’re going to get back to a sense of common good – where political differences are differences of strategy for promoting general welfare rather than the drawing of enemy lines to delineate who must be defeated – then it will be necessary to reduce income inequality.

Equality has benefits that show up all over. They show up, for example, on baseball teams. “A well-controlled study of over 1,600 players in 29 teams over a nine-year period found that major league baseball teams with smaller income differences among players do significantly better than the more unequal teams.” (Wilkinson and Picket, The Spirit Level: Why Greater Equality Makes Societies Stronger, 237). When people feel like they stand on equal footing with their neighbors or teammates, there’s a cohesion that lifts spirits, heals wounds, and improves performance.

Unitarian Universalists care about our world. And it’s clear now that

“further improvements in the quality of life no longer depend on further economic growth. The issue is now community and how we relate to each other.” (Wilkinson, Pickett)

The issue is building a world in which most of us care about the well-being of all of us. The issue is not only at the economic level but at the spirit level. The wound is to our spirits, yet, wounded as they are, the resolve to heal must also come from our spirits.

“The religious community is essential,” as Rev. Mark Morrison-Reed said, “for alone our vision is too narrow to see all that must be seen, and our strength too limited to do all that must be done. Together, our vision widens and our strength is renewed."

May it be so. Amen.