In Expenditure Cascades, based on census data for the 100 most populous counties in the United States, Adam Seth Levine, Oege Dijk and Robert Frank found that counties where income inequality grew fastest also showed the biggest increases in symptoms of financial distress, such as commute times, divorce rates and bankruptcy filings.
There is no persuasive evidence that greater inequality bolsters economic growth or enhances anyone’s well-being. Yes, the rich can now buy bigger mansions and host more expensive parties. But this appears to have made them no happier. And in our winner-take-all economy, one effect of the growing inequality has been to lure our most talented graduates to the largely unproductive chase for financial bonanzas on Wall Street… We need not reach agreement on all philosophical principles of fairness to recognize that it has imposed considerable harm across the income scale without generating significant offsetting benefits. (Income Inequality: Too Big to Ignore, NYTimes, 10/17/10)