The Wages of Inequality

Daniel Luzer wrote about how much salary a dean of New England Law School, John F. O’Brien, receives:

O’Brien earns about three times the median salary of law school deans nationally, despite the fact that his law school isn’t, well, really that good. Less than 30 percent of its 2011 graduates found long-term, full-time positions that required bar membership. The institution ranks in the “fourth tier” of law schools in the United States, but costs $42,490.

O’Brien earns $867,000 a year for running what is, at best, a mediocre law school. Yet the board of trustees of NELS seems to believe he deserves that salary:

According to the article, during O’Brien’s tenure the school has increased tuition by more than 80 percent and essentially doubled the percentage of applicants it accepts. All of this raises a lot of revenue for the school.

Though he has raised lots of revenues for the school and made trustees happy, it has not served for the greater public interest. If general public were members of the board of trustees, they probably have decreased O’Brien’s salary for burdening students with lots of loans amidst of economic stagnation. O’Brien’s achievement of increasing tuition and doubling the accepted applicants are actually toxic to greater public interest. This is a striking example of how economic inequality in our society is still increasing fast: how those with the power to do so direct resources to themselves without shame.

On the other hand, while at the top Mr. O’Brien is shoveling money out of his school, at the bottom, people in Detroit are suffering from rapidly depreciating homes and assets.

“A House Divided” by Thomas J. Sugrue in our latest issue talks about this ongoing wealth gap between blacks and whites. He reminds even after 150 years after Emancipation Proclamation, America still faces an enormous racial disparity, specifically in terms of wealth:

But for all of the talk about hope and change, the racial wealth gap has not only persisted, it has worsened. And it is this gap that is the most powerful measure of differential well-being by race. Wealth has profound consequences throughout the life cycle, from putting a down payment on a first home to spending your last days in a skilled nursing facility. Starting a business? Paying for college tuition? Making ends meet when you’ve lost your job? Covering extraordinary medical expenses? Retiring? Assets matter.

In the same issue, Phillip Longman in his piece, “Is Inequality Shortening Your Life Span?”, discusses how inequality in wealth, one of measures of status in our society, may contribute to how healthy we are—poorer we are, lower status we feel we are ranked and thus actually make us unhealthy. This explains much of the health gap between blacks and whites:

What explains the residual difference in the health status of blacks and whites who have the same-size pay check? Researchers suggest it may reflect in part the reality that at any given income level, blacks tend to have fewer assets than whites, such as home equity and financial savings. A black family earning, for example, $50,000 in income is less likely to own its own home, less likely to have received an inheritance, and more likely to be encumbered by debt than is a white family with the same income. (See Thomas J. Segrue, “A House Divided.”) Middle-class black families are also more likely than middle-class white families to bear the health consequences of having lived in poverty in the past.

Mr. Longman goes further by suggesting two facts to consider in overcoming health disparities in the U.S.:

First, it’s not just extreme poverty that is bad for your health; so is having less autonomy and status than others, regardless of your income. Among people who have plenty to eat, have equal access to quality health care, live in safe neighborhoods, and hold down jobs, health and life expectancy declines with socioeconomic position. While it is not hard to understand why truly impoverished people of all races die younger than middle-class people, it’s also true that middle-class people die younger than upper-middle-class people, and that upper-middle-class people die younger than rich people, even though none but the very poor are wanting for the basic necessities of life.

The second fact is just as strange, and equally radical in its implications, both for individuals seeking to maximize their personal health and for societies intent on creating just institutions. It is that the wider the disparities in status and power that exist between people within a given workplace, city, county, state, or country, the more premature deaths happen. Crudely put, inequality kills.

Thus even Mr. O’Brian, pulling down $867,000 per year, is subject to the negative effects of inequality, albeit in a small way. There is no escape for anyone save the very richest.

Do Hyun Kim

Do Hyun Kim is an intern at the Washington Monthly.