Unlike the days of old, low-income families are essentially comfortable these days and are not preparing to storm the streets rioting over income inequality. According to Will Wilkinson in The Economist, even though there is a wide wealth gap between rich and poor, affordable modern conveniences have leveled the playing field among the two. In other words:
Access to better goods among the least well-off has ensured that material inequality is not as profound as income inequality. Basically, most people can afford a decent microwave, even if some have far more bells and whistles than others.
The poor were much worse off 30 years ago and poverty was unimaginable at the turn of the century. Saying someone is poor now is not the same as back then. If the poor from the past could have looked ahead to seen what constitutes poverty in the 21st century, they would have wished for Doc Brown's DeLorean to take them there. Most modern households have at least one car, and their homes include heating and air, refrigerators, stoves, TVs and yes, even an Xbox or two. And of course, anyone who wants one can get an Obamaphone -- or five.
Being poor is not easy by any stretch of the imagination, but low-income families are fairing better than they used to thanks to affordable modern technology. In an outstanding paper for the CATO Institute, Wilkinson argues this point; that a person's material well-being will overshadow any income inequality. It's called the "Consumption Argument" and it has to do with a person's satisfaction with life. Despite the growing wealth gap, people's "happiness inequality" is shrinking at the same rate. Here's what Wilkinson has to say about it:
If we’re interested in the overall material well-being of a life, what we really want to know is the quantity of goods and services a person has consumed over the course of his lifetime, and the value to that person of all those goods and services.
The truly striking fact is that for decades the level of happiness inequality in the United States fell simultaneously with rising levels of income inequality, and it remains significantly lower today than it was 30 years ago during the low point of American income inequality.
Over time, the everyday experience of consumption among the less fortunate has become in many ways more like that of their wealthier compatriots.
The conclusion here is that most Americans, low-income Americans, are not dissatisfied with their lives. And they are most certainly not losing sleep over a CEO making billions of dollars when they should only be making millions. They are not upset that their $300 refrigerator keeps the milk cold, while the millionaire's fancy $11,000 talking fridge ... also keeps milk cold.
Wilkinson sums it up nicely:
At best, income inequality is a distraction.
The Occupy Wall Street crowd tried taking to the streets over this distraction and nothing changed because of their protests. That is because focusing on income inequality detracts from the essence of what is really at stake; Freedom. Without freedom, there is no equality. The government and liberal society puts the cart before the horse and wants equality first. Economist Milton Friedman has some sage advice for those who will listen:
A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both.