What is Social Inequality? (Part 1 - Definitions and Assumptions)

With our innate obsession with comparison we perceive social inequalities all around us. Furthermore, the media bombards us with news of inequalities, people organize demonstrations to protest inequality, and Facebook, reality TV, and celebrity gossip profit by highlighting the differences among us.


In addition to our innate perceptions and what we learn from others, I believe it is also important to think for ourselves. Although many of us claim to be aware of social inequalities, how would you define or explain social inequality? I encourage you to take a moment and attempt to formulate your own definition before proceeding.

Social inequality is ____________________________________.

As with many common words and phrases I have always assumed I inherently knew what they meant. However, attempting to write my own definition of social inequality proved difficult. I feel a definition of social inequality should have the following characteristics:

• Simple to understand
• Clear in meaning
• Broad in scope
• Allows differences to exist yet equality to be maintained
• For example, two people can be of different races and equal. Race may explain the presence of inequalities, but it is not in and of itself an inequality. It is simply a difference.
• Evaluates equal opportunities, not just equal outcomes
• We can lead a horse to water, but we can’t make it drink. In this scenario, both horses have an equal opportunity to drink, but their outcomes can be different. Equal opportunity, different outcome.

Since I was unable to write my own satisfactory definition, I have adopted collegiate instructor of Sociology and Criminal Justice Kimberly Moffitt's definition:

Social inequality is the existence of unequal opportunities and rewards for different social positions or statuses within a group or society.

It is simple, clear, able to be broadly applied, allows for differences while maintaining equality, and evaluates opportunities not just outcomes. In addition, it adds a key component of unequal rewards for equal opportunities. I like it a lot. Great job Kimberly!

As a topic increases in complexity, often more assumptions are required. For a fruitful and healthy discussion, I believe everyone must understand each others' definitions and assumptions. For the remainder of this post I will discuss my personally held assumptions and fundamental beliefs of social inequality. After laying a foundation of definitions and assumptions I will direct future posts towards the following:

• Do social inequalities exist?
• If so, where do they exist and how do we measure them?
• Why do they exist?
• Should they exist?
• What has and is being done about them?
• What is our goal standard of living?
• What can be done on a personal, community, and governmental level about them?

Fundamental Beliefs -

Disclaimers

1. A massive amount of debate has and can be directed towards if any assumption is true or false and right or wrong. I am open to these debates, however for pragmatic reasons these are the liberties/assumptions I am utilizing.
2. I apologize for the large number of beliefs. It is my aim to be remain as transparent as possible.

1. People should receive a just reward for their productivity.

• People should not get paid less than their productivity.
• People should not get paid more than their productivity.
• All things being equal, if Fred Flintstone produces 10 widgets a day while George Jetson produces 50 widgets a day, I believe George should receive a greater monetary reward.
2. Successful people of high integrity should not be overly punished for their productivity.
• I am open to a degree of progression within a tax system as long as everyone pays something and the highest tax rate minimally discourages productivity. Even with a flat tax structure more productive people pay more in absolute terms than less productive people.
3. Laziness and unwillingness to work should not be rewarded.
4. Personal responsibility with accountability for one’s choices should be maintained.
• At times the welfare system bails out low income/wealth people from poor choices while at times bailouts save rich people from poor choices. Both of these need to be minimized and ideally eliminated.
• That being said, for developed countries I believe there is a responsibility of the government to care for its citizens. However, I believe it should be the quinary safety net and be administered at a regional (state, county, or city) rather than national level with an emphasis on person to person giving. Please see Private Charity series for additional details.
5. Those with greater wealth/income have more choices and opportunities.
• While not the ideal scenario in all situations, I do not think this can be eliminated without violating other beliefs I hold.
6. Individuals know how to best spend their resources to maximize their own benefit (also referred to utility in economic terms).
• Large, one size fits all governments are inefficient managers of resources.
• Of note, we all have different preferences and tastes for what brings us greatest benefit/utility.
7. People create jobs. Government is responsible for creating and maintaining an environment that is just, stable, secure, safe, and rewarding for citizens to engage in business.
8. High risk businesses need a high reward. 

• This will naturally lead to differences (again, not necessarily inequality) in income and wealth as many will fail while few succeed. Those who succeed need to be adequately compensated for their risk with large rewards. Consider professional sports and lottery. Lots of people play while only a few win. However, those that do win receive massive rewards. Due to the risky nature of the business, income/wealth differences are inherently generated.
• Thus, in the absence of mass income and wealth redistribution there will always be the very rich among us.


9. The world changes. We must adapt. In the information and technology age we live in there are few (if any) who will be able to learn one skill/trade/profession and engage in this business for the duration of their working career. We must position ourselves and others to continuously adapt and learn in a changing world.
• Subsidizing outdated businesses and trades only slows the transition to more productive technologies.
• There are fewer movie rental places, ice breakers, or telegraph operators. However few would choose to give up video streaming, refrigerators, or cellphones to utilize more of these antiquated services.
10. We must have sound money to reduce social inequality. Allowing the Federal Reserve to print money and manipulate interest rates is not only ineffective, it creates market distortions that must be corrected in resulting depressions/recessions.
• Newly created money is frequently used to pick winners and losers via bailouts, waging war, and continuing public assistance programs.
• Furthermore, the inflationary effects of printing money disproportionately affect the poor. The cost of basic necessities inevitably increase faster than income. As the poor spend a greater proportion of their incomes on basic necessities, they suffer the effects of inflation the most.
11. People vote with their money and the market responds.
• This is evidenced by the success of discount stores, the fair-trade coffee movement, and fast food chains inclusion of healthy options.
• Applied to certain social inequality movements, some people value cheap products and services more than they value supporting “worthy” causes. Whether this is right or wrong is in the eye of the spender. I simply feel it is important individuals understand they are making a value judgement every time they spend money.
12. Simplicity, transparency, honesty, trust, and accountability are needed to reduce inequality.
13. We should celebrate both domestic and international gains in standard of living.
• It’s not “us versus them”.
• This highlights the importance of defining one's perspective. Do we have a narrow perspective where we compare social inequalities among our immediate peers, our fellow citizens, countries with similar economic profiles, or a broader perspective where we compare ourselves to everyone in the world?
14. Unless resources are acquired illegally, I am against large scale income/wealth redistribution.
15. If nonviolent theft is considered criminal, then nonviolent theft by businesses should be prosecuted as criminal cases or nonviolent theft should only be civil cases as well.
16. Income is income. The discrepancy in capital gains and income tax should be removed.
• I understand the base money has already been taxed, but it is only the new money that is being taxed and I support taxing capital gains and standard income at the same tax rate.
17. All in definitions. The quickest way to lower or raise the poverty rate is to redefine what poverty is.
18. Equality is promoted when societies work to create an environment where the field is level and people are fairly rewarded for their contributions.

Much effort has been directed towards reducing and eliminating social inequalities. Income, wealth, health, and a number of intermediates (education, race, ethnic, age, gender) are frequent targets of social action organizations and political campaigns. For a complex and controversial discussion to have long-lasting benefits, I believe a solid understanding of definitions and assumptions must be constructed to serve as the foundation for future problem solving. While imperfect and open to analysis, I have adopted a definition and provided my assumptions surrounding social inequalities.

As stated in “Why you need this blog”, I hope to use this foundation to help unify people rather than divide people. It is my aim to construct a framework to analyze if social inequalities exist, why they exist, should they exist, and what can be done on a personal, community, and/or governmental level about them.

Long Term Disability Part II: The Golden Circle

Simon Sinek concluded the most successful entities first and foremost answer and promote why they exist before moving to how they will accomplish their vision and what specific actions they will undertake. Per Sinek, the standard line is to start on the outside with what does one do, proceed to how to do it, and then leaving why one does it fuzzy. Unfortunately, consumers are most interested in why an entity does what they do. This is especially true as access to information, services, and goods are at an all time high. Sinek posits entities would benefit by starting in the middle of the circle by answering why they do what they do and then moving outwards to how and what.

Where Simon’s counsel, my blog, and long term disability assistance meet, is discussing the role of long term disability assistance. Put another way, why should we have long term disability assistance?


Disclaimers:

1. Please refer to general Disclaimers page.
2. I have no close relationship with anyone receiving long term disability. I have spoken with a small number on disability and those seeking disability through interactions at my work and through community organizations. Never-the-less, I do confess naivety and imperfect knowledge.
3. Public assistance programs are complicated and I do not purport to be able to construct a perfect system where everyone that needs long term disability insurance receives the perfect amount of assistance and everyone that does not need assistance does not receive it and where funds are collected in a fair and just manner.

Defining the role of long term disability assistance is part two of an anticipated six part series. Please see Part I for an initial introduction. I will start with the listed roles and goals of Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) and end with my personal thoughts on what the roles and goals of a public funded disability system should encompass.

Supplemental Security Income:

Purpose: The basic purpose of SSI is to assure a minimum level of income to people who are aged, blind, or disabled and who have limited income and resources. (Social Security Handbook)

Goals:

• It is designed to help aged, blind, and disabled people, who have little or no income; and
• It provides cash to meet basic needs for food, clothing, and shelter.

Source: Social Security Administration SSI Website

Social Security Disability Insurance:

General purposes of social security (includes OASI, a.k.a. retirement aspect of Social Security):

• To provide for the material needs of individuals and families;
• To protect aged and disabled persons against the expenses of illnesses that may otherwise use up their savings;
• To keep families together; and 
• To give children the chance to grow up healthy and secure.

Source: Social Security Handbook

My thoughts:

General Purpose: Promote value and dignity through generous physical, emotional, social, spiritual, and financial support where those with long term disabilities are empowered to thrive as a valued member of society.

Specifically, I support:

• Greater local influence
• I believe national, pubic funded disability assistance should be the quinary safety net (unemployment assistance and food assistance)
• Order of assistance: Self, friends and family, private charities, local/state governments, then national government
• Those in need receiving generous support (financially, emotionally, socially, spiritually, physically)
• Empowering those with disabilities to not only survive, but thrive
• Providing those with long term disabilities avenues to gain dignity
• I believe all people have been created in the image and likeness of God (see disclaimers). We have been graced inherent value regardless of our perceived abilities to contribute to society.
• Personal relationships and integrating those with disabilities into society
• Loneliness I fear is widespread throughout all communities, but especially those who live with disabilities.
• Sustainability
• SSDI to become insolvent in 2016 (Social Security Trustees Report Summary)

In contrast, I am against:

• Impersonal handouts
• Loss of dignity
• One size fits all
• One person’s disability will require a different set of resources than another. Money and time are tools that can produce constructive or destructive consequences. How they are used determines the degree of benefit or harm.
• Enabling/incentivizing individuals to aspire receiving disability assistance 
• Foolish allocation of resources
• There are more needs than our limited resources can meet. Many would support improved education, roads, safety, lower taxes, etc. However, to increase the support of one often requires decreasing the support of another. We need to be wise in determining how we allocate our limited resources.
• Dependency on a government system 
• As stated previously, I support national disability assistance is quinary safety net
• Segregation between those with and without disabilities
• Pity
•  All people have inherent value (see above) and while empathy should be extended, a system solely built on giving out of pity rather than giving out of generous motives will likely be harmful for both the giver and receiver.

Inspirational statements and visions form the necessary foundation to build public assistance programs. However, even with a solid foundation, poor logistics and implementation can be a cause of failure. With a solid foundation of why disability assistance matters, I will transition into looking at the nuts and bolts of our current long term disability system and eventually in part six propose changes.

Next post topic: Disability Part III: Current Programs

Long Term Disability Part I: Champs or Chumps?

"What should we, as a country, do for people who aren't making it? Americans want to be generous. But Americans don't want to be chumps."

- Chana Joffe-Walt - NPR

America provides long term disability assistance through two programs, Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI).

As highlighted in Forbes magazine and National Public Radio, increasingly more debate and discussion is revolving around America’s disability system. SSDI is projected to become insolvent in 2016 and current proposals are on the table to pull money from Social Security retirement funding, a passionate topic for many. Furthermore, there has been an increase in the usage of both SSDI and SSI prompting review of the effectiveness and efficiency of America’s long term disability system. Secondary to these trends, I anticipate disability assistance will receive additional attention in the media and everyday conversations.

As with most public assistance programs, disability assistance is very complex. This is especially true in an aging and growing population coupled with periods of strong and weak economies. Due to the complexity, I will write a series of blog posts detailing various components of America’s disability system including:

1. Overview – Utilization and Costs
• How extensive is disability in America?
2. For and Against
• What do I see as the roles and goals of public funded disability assistance?
3. Current Programs (SSDI and SSI)
• What is currently being done for those with disabilities?
4. Cited Effects
• What effects do others believe public disability assistance produces?
5. Validity of Cited Effects
• What cited effects hold up under closer scrutiny?
6. Proposed Changes
• What changes, if any, would I propose to America’s disability system?

Detailed below is a snapshot of disability in America. Unfortunately whenever data is presented biases are at work. That being said, I have attempted to simply present facts and avoid coloring the statistics with my personal interpretations. In future blog posts I will outline details such as how current programs define and determine if an individual is disabled and include my own analysis and interpretations of available data.

Data has been broken down to include total usage of both Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) as well as individually. Please refer to titles and captions of graphs below for additional details.

Total Recipients:

~30% receive both SSDI and SSI

Only SSI provides benefits to parents who have children (0-17 years old) with disabilities. SSDI has a category of adult children, however this represents individuals > 18 years old who acquired a disability while a child.

Total Benefits Paid: (administrative fees not included; 2014 CPI adjusted where noted)

SSID benefits have increased in total dollars (both unadjusted and CPI adjusted) and % of Gross Domestic Product (GDP). The percent of total benefits to GDP has increased much less in SSI than SSDI. Click link below for expandable graphs of SSI and SSDI benefts.

SSI and SSDI breakdown

CPI adjusted dollars per working person (red line on right vertical axis) shows the amount each working person funds long term disability assistance. In 2012, 76% of the population was considered working population. The other 24% includes children, elderly, and disabled who do not have earned income.

Graph above shows the CPI adjusted average benefit recipients receive and how this compares to the median household income (red line on vertical axis to the right). In general, SSDI average benefits are twice as much as SSI average benefits. I combined them as it gets complicated when factoring in ~30% of recipients receive both SSDI and SSI benefits.

Annual applications and percent approved for benefits:

General reason for receiving benefits: (all current beneficiaries and last year approvals)

Both the left and right vertical axis show diagnosis of only new applicants each year.

References:
SSI 2014 Annual Report
SSDI 2013 Annual Report
Census.gov



Many questions arise from the data above. Why the steady increase in recipients? Should we be concerned with the growing number of children on disability? Why the change in reasons recipients receive assistance? Is the trend from an aging and growing population? More women in the workforce? Greater awareness to those in need there is help available? Waste, fraud and abuse?

With an increasing amount of money being received by a greater number of individuals, are we champions in meeting the complex needs of our citizens or are we chumps in allowing waste, fraud, and abuse of taxpayer money?

Next post I will outline my thoughts on the roles and goals a disability assistance system should meet. I challenge you to contemplate what you see as the role of public funded disability assistance. In addition, based on your defined role, what aspects of disability benefits you are for and against.


Next Post Topic: Disability Part II: Roles and Goals