Social cohesion — United States · Synthesis

The highest income inequality in the G7. The Gini index of disposable income (after taxes and transfers) stands at around 0.39-0.41 (OECD), the highest level among the large rich countries. The concentration of income at the top (top 1%, top 10%) is among the highest in the developed world and has increased over recent decades.

Highly concentrated wealth. Wealth inequalities are even more pronounced than income inequalities (Federal Reserve, Survey of Consumer Finances): a significant share of net worth is held by the wealthiest households. Access to home ownership and financial markets is a major driver of these gaps (see Housing category).

A poverty rate measured in several ways. The official poverty rate stands at around 11% (Census, 2023), but the Supplemental Poverty Measure (SPM), which accounts for benefits and the cost of living, gives a level of around 12-13%. The gap between the two measures illustrates the real but limited effect of American redistribution.

A rebound in child poverty. The expanded Child Tax Credit during the pandemic had driven child poverty to a historic low; its expiry caused a sharp rebound (the SPM child poverty rate roughly doubled between 2021 and 2023, Census). This is the clearest illustration of the effect of transfers.

A high median income. Median household income (≈ $80,600 in 2023, Census) is high by international comparison, reflecting the wealth of the country — but dispersion around that median is wide, and the cost of healthcare and housing erodes real disposable income.

The debate on transfers. The Child Tax Credit episode showed the effectiveness of direct transfers on poverty, but their continuation is politically divisive. The trade-off between family support and fiscal cost (see Economy category) structures the debate.

Cost of living and the middle class. The cost of healthcare, housing and education weighs on the middle class and fuels a sense of downward mobility, despite a high median income. This is a central theme of public and electoral debate.

Social mobility. Intergenerational social mobility is lower in the United States than the "American Dream" would suggest, and lower than in several European countries according to the OECD. Educational inequalities (see Education category) and territorial disparities are key determinants.

Racial and territorial inequalities. Income and wealth gaps by ethnicity and by territory remain marked and persistent. Reducing them is a long-term cohesion challenge, documented by the Census and the Federal Reserve.

The open questions. Three issues will shape the period: (1) containing inequalities among the highest in the rich world; (2) reducing child poverty, which is very sensitive to transfers; (3) restoring social mobility and the sense of security of the middle class.

Placed in their environment, the United States stands out for higher income and wealth inequalities than the other large rich countries, more limited redistribution and a poverty that is more exposed to swings in social policy.

Three takeaways. (1) Inequalities: the highest in the G7. With a Gini of ≈ 0.39-0.41, the United States exceeds the United Kingdom (≈ 0.35), Italy, and clearly France (≈ 0.29), Germany (≈ 0.30) and Canada (≈ 0.30).

(2) Weaker redistribution. The American social and tax system reduces market inequalities less than European systems: the gap between pre- and post-redistribution inequality is smaller than in France or Germany.

(3) Volatile poverty. The 2021-2023 episode (fall then rebound of child poverty) shows a more discretionary and less stabilizing social safety net than in Europe, where automatic benefits absorb shocks more effectively.