The chart from here: One chart that shows how much worse income inequality is in America than Europe The chart: Excerpt: No good can come from the enlarging Income Disparity in the US. We'd better do something before it explodes. Getting rid of DD next year would be a good "something". Providing that whoever is elected (Right or Middle or Left) the country can get back on track. Meaning enhancing purchasing power of the middle-classes and not just the upper-income classes. Let's remember, of the tremendous wages that the upper-classes earn, in fact, not that much of it goes back into churning the economy. Most just goes into Savings in the form of "Investment Plans" (like PIPs) that do not directly boost the economy all that much ...
The amount of inequality in Western Europe has been increasing as they've been bringing in migrants from other parts of the world. And also creating an oversupply in the labor market, which must surely be putting a downward pressure on wages, especially on the lower skill lower income end. And it's not only on the labor market end, all those people crowding into city areas have also been creating an upward pressure on land and housing prices, and leading to shortages of affordable housing (again, impacting the poor the most). Western Europe will experience problems that once only the US experienced. One of the first signs will be when no wants to take public transportation anymore because it's too dirty and unsafe. Then there will be neighborhoods that people don't want to live in because of the crime, and schools that parents don't want their children to go to. That will further drive up housing costs in the areas within range of the remaining good schools. To give you some idea of how much this will have an economic impact, I will quote this figure: In a speech given at Berkeley Professor Elizabeth Warren cited a study which showed that the inflation adjusted cost of housing for a family without children between 1983 to 2003 increased 50%. During that same time period the inflation adjusted cost of housing for a family with children increased 100%. This is a difference of nearly $100,000. Families were paying more money for good school districts. Families without children did not have to buy houses in good school districts, and so they had a wider pool of homes to select from.
