Economic inequality produces nationally detrimental biopsychosocial effects
In developed, affluent nations, it is the relative economic inequality between members of that population that drive consequent, negative biopsychosocial effects upon that population—it is not the overall wealth of the nation. This is the paradox: wealth does not necessarily equate to reducing the problems of health and society, and can serve to exacerbate them. Simply put, a very wealthy nation—such as the USA, with a very high Gross Domestic Product (GDP)—can nonetheless possess an extreme range of economic inequality among its citizens. Such vast economic disparity inherently results in a profoundly negative interplay of biologic, psychological, and social influences within that nation. Conversely, in a more economically modest nation, if there is a narrower range of economic inequality, then there is a lessening of such negative biopsychosocial effects. This is because the wealth is distributed more evenly in the latter case.
The greater the economic inequality that exists within a nation, the greater the gradient between the rich and the poor that exists—and it is this gradient that creates the damage. It is a negative biopsychosocial effect that creates the injurious outcomes—the greater the economic inequality within a nation, the greater the grave health and social problems that society will suffer. An individual's standing in the socioeconomic hierarchy creates the dire ill effects caused by economic inequality. For this reason, merely increasing the wealth of a nation will not reduce many of the social ills which plague its citizens. It is by redistributing the wealth within a nation that decreases economic inequality and, consequently, provides relief to many of the health and social ills.
Moreover, from Richard Wilkinson, the effect of economic inequality can clearly be seen in the summary graph below. (Note: The USA is positioned in the extreme upper right of the graph.)
To learn more about these subjects, CLICK HERE to view Richard Wilkinson's video "How economic inequality harms societies," which is also in the EDUCATIONAL section of the site's navigation bar.
For those who still erroneously believe that just by increasing a country's wealth (GDP), this will somehow automatically decrease the negative aspects of their society's problems, they should consider the following regarding the ill effect of economic inequality upon a nation's GDP itself: it is now known that an elevated economic-inequality rating actually thwarts the growth of that country's GDP. Alternatively, when income and wealth are put into the hands of the many instead of just the few at the top, it produces better economic outcomes for a nation's GDP in addition to reducing that nation's health and social problems.
Two economic-publication excerpts below—one from Forbes and one from The Economist—bear out this relationship between wealth in the hands of the few at the top and consequent overall economic and biopsychosocial decline versus the relationship between an income share that benefits the masses as a whole and consequently prompts growth that benefits all of society.
Income Inequality Hurts Economic Growth
From: Forbes, By Erik Sherman, Dec 9, 2014
"There is and has been a reduction of economic growth because of the growing concentration of income among a smaller portion of the global population."
"The new OECD analysis found a ‘negative and statistically significant’ correlation between income inequality and economic growth. Specifically, the 3 Gini point rise in inequality that was the average for OECD states over the last 20 years meant 0.35 percent less economic growth per year for the same time, or a total 8.5 percent GDP loss in that period."
How inequality affects growth
From: The Economist
Jun 15th 2015, 14:23 by R.A.
"And on June 15th economists at the IMF released a study assessing the causes and consequences of rising inequality. The authors reckon that while inequality could cause all sorts of problems, governments should be especially concerned about its effects on growth. They estimate that a one percentage point increase in the income share of the top 20% will drag down growth by 0.08 percentage points over five years, while a rise in the income share of the bottom 20% actually boosts growth."Click here to return