Income Inequality: Are Our Principles The Real Root of The Problem?

Income inequality is often thought to breed social tensions when the poorer groups in a society feel deprived or dispossessed compared with other people. Who wouldn’t, when, every day, someone in the bedrock of wage and compensation (bottom 10 percent) reads about the life of the blessed upper 1 percent, whose monthly incomes equate to a lifetime of minimum wage earnings.

In the latest report on global income inequality, the world’s bottom earners’ income grew annually by only 1.4 percent in the last 30 years while the top earners grew by 2 percent. Among Americans, a huge share of economic growth has gone to the top 10 percent income earners at an average of $27 million per household. Meanwhile, the average income for the bottom 90 percent of Americans is at $31,244.

The feeling of having nothing while others enjoy everything leads those who don’t possess what others have (money, property, jobs, opportunities) to seek ways that would give them the same possessions. These ways include disregard for social norms and conducts including transgression of commonly upheld values where they resort to – and even crimes against both the poor and the rich.

In many of the research works of epidemiologists, Richard Wilkinson and Kate Pickett, they documented various evidence that economic inequality correlates directly with levels of crime and many other measures of social dysfunction. Countries with lower inequality have higher life expectancies, fewer homicides, lower infant mortality, and higher levels of trust, among others.

Where health and crime are concerned, it has been established that there is a strong correlation with income inequality, but not so much where values are concerned. Is it really income inequality that must be blamed for the seeming disregard for values that were previously prized and honored?  Is being hard-up the cause of deteriorating values formation among the young?


Many studies and researches on income inequality consider that its causes are not just economic. Things like effort, drive, knowledge, skills, and character have roles to play (and as such, the American dream lives on among majority of Americans.)

Here now, we can also add values, particularly the differences in values among people, what they uphold and hold dear, and what they are willing to do to attain their desired economic and social position.

Values form our fundamental beliefs, the principles we use as gauge to define which is right, good, and just. Our set of values provides guidance to determine the right from the wrong, the good from the bad, the acceptable from the repulsive. They are our standards in living a life as we deemed proper and acceptable.

Values can be a complex issue because it encompasses culture, traditions, and beliefs. What one may regard as value may not be so in another culture or environment. As such, the values that we mean to have been affected by forms of inequality would be universal values – trust, respect for life, and others, smooth interpersonal relations, good manners, and right conduct, the basic values that come into play when relative incomes are at play.

Where does income inequality come in in the corruption of the mind and heart that brings about deterioration of these values among men? Is income inequality the cause or the effect?


Where values are concerned, perceived inequality (or how one sees himself compared to other people like relatives, friends, neighbors, work colleagues, or people in the community) plays a big role on whether economic and social position affects one’s long-held values (change them, modify them it, or dismiss them altogether).

In terms of values, relative income inequality (one’s income in relation to what others earn) rather than absolute income (factual value of one’s earnings, with no comparative angle to what others earn), matters more.

A factory worker may ponder about his absolute income as either sufficient or insufficient where her own obligations and expenses are concerned. When he observes that his co-worker lives in a bigger house and has a car to conveniently take him around town, he ponders about his relative income in relation to his co-worker’s, and realizes he is making much less. It now changes from being an issue of adequateness of his own (absolute) income to the issue of what he does not have and cannot enjoy that the other guy possesses because his income is much smaller. To address his feelings, he can resort to maligning or sabotaging his co-worker’s work. If he has strong convictions, he will simply focus on himself by working longer, harder, and more.


Values are all positive in their essence and core intent, but not all values one upholds automatically equate to positive results. Its effect depends on the situation. For instance, a person who strongly values security exhibits positive inclination towards responsibility and ambition, but not necessarily aims for effects like honesty, fair play, or good personal or community relations.

Parents’ values shape the family’s and children’s future. In many poor communities, including the U.S., there are people who firmly strive to better their lot and improve themselves. Parents sacrifice to send their children to school (exhibiting and putting premium on the value of education and ambition) and help them in their educational journey so that their young can have a better life compared to them (not exactly to shoot at once to the “wealthiest” summit.)

Of course, there will also be the opposite set within a substructure, like poor or low-income parents who couldn’t care less to give their children education, citing their own circumstance where they get by through accepting their fate as that of their children’s (exhibiting and putting premium on the value of  acceptance and contentment).

Transgressions reflect lack of values, not presence of income inequality. In terms of values of the higher forms like respect for life and consideration of others, it can also be said that income inequality does not breed transgressions for these values, but are committed because of the lack of major life values. No matter how desperate a situation is, the one who respects life will never kill to gain money and other things and the one who upholds consideration of others will not take away someone’s possessions, especially using coercion or violence.


The popular book-turned movie franchise The Hunger Games tells the story of Katniss Everdeen, who lives in post-apocalyptic America and who became an accidental participant in the Hunger Games, an annual event in which youths from poor districts compete in a televised battle for sole survival. The story deals with severe poverty, oppression, and what limits humans can overtake to survive. It shows that in spite of extreme conditions, there are those who are not overcome by helplessness and want, uphold their values and make big sacrifices for it. Though fiction, the plot, inspired by war and shifts in values propagated by media, also reflects the cause-effect dance of income inequality and values and the triumph of men choosing the good from the bad.

Absence of values contribute to income inequality. A person who has very low or no values at all does not have anything of value to offer to society, and therefore, ends up poor. This kind of attitude triggers income inequality.

A man who dismisses the value of hard work, education, and discipline and resorts to get-rich shortcuts, such as gambling or getting into bad employment or business, loses sense of responsibility and the values that are associated with it while waiting for his luck or chance. In the end, there is no knowledge and skills acquired, and inevitably, he loses out in  the employment or business game.

In a 2012 study by economists Giacomo Corneo and Frank Neher, which investigated  value systems in work ethic, civics, obedience, honesty, altruism, and tolerance from 34 OECD countries over a period of 30 years, it was found out that there are no robust effects from inequality on values.

In contrast, “there is evidence that a more unequal income distribution strengthens the work ethic of the population. Thus, income inequality seems to generate work incentives not only via the pecuniary reward of work, but also through the symbolic reward it receives.


The study’s conclusion underlines the silver lining behind the dark cloud of  wealth distribution gap – despite life imperfections like income inequality, the inherent goodness in men and their spirit of preservation, community, and fellowship cannot be easily shaken down by even the most challenging of obstacles – financial inequality.

Income inequality, as more of an effect rather than a cause of complex sets of values, can be better grasped growing up and understanding that there is no economic, social, and moral justification for a good life if it is attained through selfishness, viciousness, or avarice.

Astrid Eira

By Astrid Eira

Astrid Eira is a resident B2B expert of FinancesOnline, focusing on the SaaS niche. She specializes in accounting and human resource management software, writing honest and straightforward reviews of some of the most popular systems around. Being a small business owner herself, Astrid uses her expertise to help educate business owners and entrepreneurs on how new technology can help them run their operations. She's an avid fan of the outdoors, where you'll find her when she's not crunching numbers or testing out new software.

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