Carving Up the Economic Pie

2 min
at 10:43 PM

Imagine you have been invited to a holiday banquet for a hundred. The room is sumptuous and warm, with rich colors and scents, and set with five large tables, seating 20 people each. As you walk in, you choose a number from a large bowl, which determines your assigned table.

Instead of dinner, 100 pies get wheeled into the room, and waiters swoop in to distribute them. Eighty-four of the pies go to Table One, 11 to Table Two, and four to Table Three. All heads turn to the last pie. The head waiter ceremoniously cuts it into 10 pieces. Two slices are given to Table Four, and one to Table Five. The remaining slices get sent over to the first two tables.

This is not a fifth grade math problem. Rather, this is the current distribution of wealth in our society: the bottom 40% of Americans own 0.3% of the country's wealth, compared to the top 20%, who own more than 84%. What's worse is the lowest 10% of Americans have a negative net worth: an average of $2,000 of debt.

Multiple surveys in the last few years have found that large swaths of Americans don't have the financial reserves to make it through situations many might consider a nuisance, and some might not give a second thought to. For example, a Bankrate survey from earlier this year found that only 37% of Americans could cover an unexpected $500 car repair or $1,000 ER visit from their savings. At the same time, the average CEO in the United States makes about 300 times what an average worker earns in a given year.

The thing is, most Americans don't begrudge the CEO. We believe that talent, hard work, and even luck should determine how high you can go At the same time the current maldistribution of income and wealth is not only immoral but also politically untenable, as evidenced by the enormous discontent surfaced by the recent election.

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This is a wake-up call. As a nation, we must find a way to both expand and redistribute the pie.

With a Perspective, I'm Alice Chen.

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Alice Chen is a primary care physician in San Francisco.

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