The Gini index measures the degree of inequality in the distribution of family income in a country.The higher the Gini coefficient the higher the income inequality. According to the CIA’s The World Factbook the Scandinavian country of Sweden has the lowest Gini coefficient.The U.S. ranks 41st just behind its former colony of Philippines with a Gini of 45.

Among the developed countries, the U.S. has the highest income inequality between the top and bottom percent of the population. Various factors such as the political structure, form of economy, tax policies, culture, etc. contribute to this situation. The two-party democratic system with politicians selling out to the highest bidder makes the transfer of wealth from the lower section of the population to the elites easier on a daily basis.

The following chart shows the income inequality for select countries:

Click to Enlarge

Source: Halloween: 5 frightful slides on the world economy, CityWire

The top 10% of the population owns over 70% of the wealth in the U.S. The bottom 50% owns less than 5% of the wealth. Extreme levels of income inequality where a few become filthy rich and the majority becomes dirt-poor having to eat grass or starve may lead to revolutions such as the French Revolution. Currently social safety nets such as Medicare, Medicaid, Food Stamps, etc. are keeping millions of Americans from  rising up.

Here are a few articles related to this topic:

Wealth, Income, and Power, by Professor by G. William Domhoff

Income Inequality Is the Enemy of Economic Growth: Robert Reich, Yahoo Finance

The Unequal States of America: a Reuters Series, Reuters

Income Inequality Is What’s Destroying America. Forbes

What is income inequality, anyway?, CNN

Inequality – Growing apart, The Economist

Robert Shiller: Income Inequality Is ‘Most Important Problem’, Huffington Post

It’s the Inequality, Stupid, Mother Jones

An interesting chart from the above Mother Jones article: