Total Inequality is not merely income inequality (although it matters) nor merely wealth inequality (although that matters, too). Total Inequality would refer to the sum of the financial, psychological, and cultural disadvantages that come with poverty. Researchers cannot easily count up these disadvantages, and journalists cannot easily graph them. But they might be the most important stories about why poverty persists across time and generations.
It’s expensive to be poor—in ways that are often quantitatively invisible. Research on the psychology of poverty suggests that not having enough money changes the way people think about time. It’s hard to prepare for the next decade when you’re worried about making it to next Monday. The tens of millions of Americans without bank accounts can spend as much as 10 percent of their income on pawn shops, check-cashing services, and payday loans that charge punishing fees.
So, if a single mother gets a job (or a government benefit) and a bank account that rescues her from the psychological crush of poverty, how much is that new income worth? More than the number printed on the check. Its total value might include (a) the fact that she might be able to save some of that money and build a little wealth; and (b) the fact that she’ll never have to visit another usurious payday lender in her life.
Total inequality is a cultural force, insinuating itself into family life and classrooms and replicating across generations. Consider the story of marriage and inequality. Marriage used to be a union between opposites. He worked in an office, and she worked at home. Marriage today is more likely to be a relationship between two similar people with similar ambitions. “Assortative mating” is the officious term, and it means people are more likely to marry and have kids with somebody from their (or, really, their parents’) income bracket. Rich marry rich; poor marry poor.
But at the bottom of this big sort, people have turned away from marriage. Economic insecurity for men led to a collapse in marriage rates among less-educated couples. These households earn less early on, but the demise of marriage does not show its true costs in today’s income tables. It will take years to see the damage. Marriage inequality in one generation creates economic inequality in the next generation, according to a new paper from researchers at Washington University in St. Louis and University of California, Santa Barbara. Children of low-income, non-married couples are more likely to grow up without both parents, more likely to experience family instability, less likely to go to college, less likely to earn above-median wages, and less likely to send their own children to college.
Or consider the story of geography and inequality. In the big picture, affordability and work are moving to different parts of the country. The cities where households bringing in median wages can afford the highest share of homes are also the cities that researchers have flagged as being bad for poorer kids to work their way into the middle class. Meanwhile America’s best cities for intergenerational mobility are its most expensive metros. The separation of affordable houses from jobs is even happening within metropolitan areas: Between 2000 and 2012, the number of jobs within the typical commute distance of a given city fell by 7 percent, as poor and minority residents moved to the suburbs, further and further from the job centers.