The Gini Index: Another American Claim to Fame

By Miryam Ehrlich Williamson

Yesterday it was where we stand as a nation with regard to the effectiveness of our health care system, as measured by life expectancy.We got to stand up and cheer, “We’re Number 49!!!” Yay, us.

Today it’s where we stand as a nation with regard to the relative distribution of family wealth. This time We’re Number 42. That sounds better, but it isn’t.  We’re the 42nd country on a list of 134 countries where Number 1, Namibia, has the highest level of inequality in what families receive as income. Bracketing us on the inequality scale are Uruguay (#41) and Cameroon (#43).  Even the Ivory Coast, currently in the news because two men claim to have won the presidential election, has a lower rate of income inequality than the good old U S of A.

The way this list is set up being lower on it is better, if you think equality is a good thing.

Once again, this information comes from that left-wing-Commie-socialist rag The CIA Factbook. For this ranking the CIA used a complex calculation that you can read about here, where the ranked list also is. I don’t know enough (heck, I don’t know anything) about statistics, so I can’t explain how they figured out the ranking. What I can say is that I’m satisfied it was applied in the same way to every country.

If the CIA wanted to cook the books on this subject, they certainly wouldn’t have left us in 92nd place, which is where we are if you turn the list upside down and call Sweden, the country with the fairest distribution, Number 1. In this reverse ranking, where the closest to equality is at the top, higher is better, if you think equality is a good thing.

Going back to the listing in order of inequality, and keeping in mind that we’re the 42nd-most unequal, here are some of the countries we compare ourselves to — usually seeing our country in a more favorable light. Russia is 53rd, China 54th, Japan 74th, the United Kingdom is 92nd, France 98th, Canada 100th, and Germany 125th.

Here’s another way to look at it. Countries are ranked in the CIA Handbook according to the Gini coefficient (or Gini index,) named for the Italian statistician Corrado Gini, who published a paper about it in 1912. The index measures the inquality of a distribution — it could be wealth, test scores, the incidence of a particular disease, or just about anything you can measure. Perfect equality would yield a Gini score of zero; complete inequality would be 100. When you talk about a Gini score (or index) lower is better, if you think equality is a good thing.

Sweden gets a 23. Namibia scores 70.7.  The US weighs in at 45. The midpoint between 23 and 70.7 is 46.9.  We’re not even halfway to equality.

From the US Census Bureau we can obtain a list of US Gini scores over time. Look at what’s happened:

1929: 45.0 (estimated)

1947: 37.6 (estimated)

1967: 39.7 (first year reported)

1968: 38.6 (lowest index reported)

1970: 39.4

1980: 40.3

1990: 42.8

2000: 46.2

2005: 46.9

2006: 47.0 (highest index reported)

2007: 46.3

2008: 46.69

2009: 46.8

Remember: the higher the index number, the less equal is the distribution. The difference between the US scores at CIA and Commerce have to do with slight differences in what is being measured. Also, in 1992, Commerce changed its method of calculating the index, resulting in an upward shift of about two points. What’s most relevant here is the trend. And the fact that 1929, when the score was high, is when the Great Depression began. And the fact that 2007, when the score was the highest (most unequal) in our history, was the beginning of the Great Recession — the one we’re in now unless you’re so rich you’re untouchable.

For what it’s worth, the European Union’s Gini index is estimated at 31. Lower is better, if you think equality is a good thing.

I don’t know about you, but the country I grew up in prided itself on its dedication to liberty and equality. Now all we hear is liberty. Equality, even of opportunity, let alone financial security, is a value we seem to have forgotten.

Yay, us.

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One Response to “The Gini Index: Another American Claim to Fame”

  1. Great article and insight!

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