Interns with The Institute of World Politics had an opportunity to speak with IWP professor Dr. Anne Rathbone Bradley about income inequality on October 14, 2014.
During the meeting, Dr. Bradley explained how income inequality, although often viewed as detrimental, can actually be a byproduct of natural economic growth.
Dr. Bradley described how the GINI Coefficient – a measure intended to represent a nation’s income distribution – should always be seen with supporting information, as it does not give a holistic view of a nation’s economy. She gave an example indicating that wealth in Afghanistan is more evenly distributed than in the United States, yet this fact alone would not persuade anyone to move to Afghanistan. She cautioned that one should look at many different facets of an economy in order to get the most accurate picture.
Other aspects of the economy she recommended keeping in mind include: income mobility, i.e., how easily people can move between income brackets; consumption equality, i.e., how different income brackets can utilize the same services offered; and how different economic metrics are calculated, making sure to see if things like tax laws or transfer payments were included in an analysis.
Lastly, Prof. Bradley noted that cronyism, the changing of laws and regulations to directly benefit a certain company, eliminate competition and can greatly affect an economy. Such practices actively lead to the detriment of the poor.