Wagemark Resources and News

A Standard & Poor’s surprise

A report by the financial services company Standard & Poor’s dominated headlines this week when it argued that inequality is a threat to U.S. economic growth—not exactly a stance one might expect from Wall Street. Of particular concern to one of the firm’s chief economists has been the onset of the most recent recession and its slow recovery. As the New York Times’ “Upshot” blog would point out, the report didn’t quite break any new analytical ground. Still, as the author writes, “it is a sign of where things are shifting: Anyone who wants to explain why the United States economy is evolving the way it is needs to at least wrestle with the implications of a more unequal society for the economy as a whole.”

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The harm brought on by inequality, of course, extends beyond the economy. Recent findings released by a group of researchers in the journal Demography suggest that income inequality has widened the life expectancy gap in the U.S. to a greater gulf than in most other developed countries. While unequal wealth distribution hasn’t had much of an effect on old-age mortality, it has led to a rise in deaths of younger people by violence or limited healthcare access. As a result, Healthline reports, life expectancy in some U.S. counties is lower than it is in Honduras or the Philippines.

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We all know that America’s economic recovery hasn’t treated all earners equally (in 2012, for instance, the top 10 percent of U.S. earners took home more than half of the country’s income). Similarly, not all metro areas have felt an equal blow. As Richard Florida reports in CityLab, metros like New York, Detroit, San Francisco and L.A. report income inequality levels not unlike those of developing world nations like Swaziland and the Dominican Republic. But, as Florida is quick to point out, the disparities are seen across the map, underscoring “an issue that the entire nation will have to acknowledge and tackle.”

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Meanwhile, also in CityLab, a new study probes the relationship between gentrification, race, and class-based inequality.

Florida writes:

Across the board, the likelihood of gentrification declined as the proportion of black residents in a neighborhood went up. The difference in reinvestment levels between neighborhoods of 35 and 45 percent black residents was more than twice the gap in extent of gentrification between neighborhoods of 5 and 15 percent black residents.

This persistent segregation, according to Florida, helps explain the division that happens within cities and metropolises.

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