Measuring Inequality
I recently saw an article in Slate which was fine as far as it went, but which prompted me to deliver a bit of a rant at Hacker News about how we talk about income inequality in America, which I've cleaned up a bit and am also posting here. The first thing that annoys me about how most people talk about inequality in America is that people often just use one metric, and ignore all the others. You could talk about: Total Compensation - including untaxed things like health insurance as well as paychecks and capital gains. Taxed income - which the SSA confusingly refers to as "Total Compensation", which is income plus capital gains and bonuses but not things you don't pay taxes on. Pure income - your paycheck. Wealth - how much you have in your bank account plus how much your house is worth. Private consumption - how much you spend each year on stuff for yourself, rent and food and fun things. Total consumption - private consumption plus whatever goods an...