The Economist Got It Wrong on U.S. Income Inequality

April 10, 2009

In its special report on the rise and fall of the wealthy, referring to the trends in income inequality in the United States The Economist (April 4-10th 2009, p. 3) states “… Another international study found that only Mexico and Russia had more unequal income distributions than America.” That is plain wrong. In Latin America alone all the eighteen countries for which there are comparable data show more inequality than the United States, and that is the case for dozens and dozens more around the world. Undoubtedly, in the last two decades inequality in the U.S. has risen sharply and shamefully. But disposable income (after transfers and taxes) inequality in the U.S. is still far from the levels found in most of the developing world.

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1. D. Watson Says:
   April 16th, 2009 at 5:21 pm

   On the other hand, the same report also indicated:

   “Figures from the United Nations suggest that America’s Gini coefficient is lower than that of many developing countries but well above the levels recorded by egalitarian Denmark, Finland and Sweden, where it does not seem to have risen much.”

   So The Economist did report it elsewhere. Since they don’t obviously indicate whose study it is (and oughtn’t they report that?) is your complaint more that The Economist half-cited a potentially incorrect report, that it didn’t correct the report, or that someone wrote a report that published such an incorrect conclusion? I say potentially because there might be sampling issues that justify the conclusion.

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