Using statistics from 23 developed countries and the 50 states of the US, British researchers Richard G. Wilkinson and Kate Pickett found a correlation that remains after accounting for ethnicity, national culture and occupational classes or education levels. Their findings place the United States as the most unequal and ranks poorly on social and health problems among developed countries.Richard G. Wilkinson and Kate Pickett found a correlation that remains after accounting for ethnicity, national culture and occupational classes or education levels. Their findings place the United States as the most unequal and ranks poorly on social and health problems among developed countries. The authors argue inequality creates psychosocial stress and status anxiety that lead to social ills.
A 2009 study attributed one in three deaths in the United States to high levels of inequality. According to The Earth Institute, life satisfaction in the US has been declining over several decades, which they attributed to increasing inequality, lack of social trust and loss of faith in government.
A 2015 study by Angus Deaton and Anne Case found that income inequality could be a driving factor in a marked increase in deaths among white males between the ages of 45 to 54 in the period 1999 to 2013. So-called "deaths of despair", including suicide and drug/alcohol related deaths, which have been pushing down life expectancy since 2014, reached record levels in 2017. Some researchers assert that income inequality, a shrinking middle class and stagnant wages have been significant factors in this development.
According to the Health Inequality Project, the wealthiest American men live 15 years longer than the poorest. For American women the life expectancy gap is 10 years.
Krugman argues that the long-term funding problems of Social Security and Medicare can be blamed in part on the growth in inequality as well as changes such as longer life expectancy. The source of funding for these programs is payroll taxes, which are traditionally levied as a percent of salary up to a cap. Payroll taxes do not capture income from capital or income above the cap. Higher inequality thereby reduces the taxable pool.
Had inequality remained stable, increased payments would have covered about 43% of the projected Social Security shortfall over the next 75 years.
Classical liberal economists such as Friedrich Hayek maintained that because individuals are diverse and different, state intervention to redistribute income is inevitably arbitrary and incompatible with the rule of law, and that "what is called 'social' or distributive' justice is indeed meaningless within a spontaneous order". Those who would use the state to redistribute, "take freedom for granted and ignore the preconditions necessary for its survival".