Op-Ed: A New Take on Income Inequality and Crime

By Sam Pizzigati

Editor, Too Much

Do crime and inequality run together?  Sociologists, psychologists, and epidemiologists — scientists who study the health of populations — have over recent decades released serious research that shows a strong connection.

But most of this research has been what investigators call “cross-sectional.” Researchers have compared different places and found these places — be they nations or U.S. states or metro areas — will be more likely to have higher crime rates if they also have higher rates of income inequality.

British investigators Hector Gutierrez Rufrancos, Madeleine Power, Kate Pickett, and Richard Wilkinson have chosen a different focus in their new paper, Income Inequality and Crime: A Review and Explanation of the Time-Series Evidence, in the October 2013 issue of Sociology and Criminology.

The four scholars they probe whether “time-series” data confirm the crime-inequality connection.  In other words, does crime increase over time as inequality increases?

This new analysis reviews 17 different time-oriented research efforts and “very strongly” confirms an inequality link with property crime.  The link with violent crime turns out to depend on the type of violence.  Homicides, murders, and robberies show a sensitivity to rising inequality.  Other violent crimes don’t.

That finding may, the authors of this Inequality and Crime study note, reflect criminal incident “measurement error.”  High-profile violent crimes like homicides typically get comprehensively reported.  Other violent crimes — most notably rape — tend to get underreported.

Just how does inequality impact crime?  We still have, the researchers note, “no conclusive evidence” on the exact mechanism linking inequality and crime rates.

That remains, the four add, an area “where future research would be valuable.

Income inequality not only breeds crime.  It breeds depression, too, the Harvard School of Public Health reports.

“Feeling depressed?” the Harvard analysts ask.  “We can make an educated guess where you probably live: In a distinctly unequal place.”

Their latest research links depression to income distribution.  Residing in a state “with higher income inequality,” the researchers behind the new study find, “increases the risk for the development of depression among women.”  Their research controlled for a wide range of other possible explanations, including prior family history of depression.

Women in unequal states — like New York — turned out to be “nearly twice as likely” to experience depression as those in Utah, Alaska, and other much more equal states.

Unnoticed in the huge headlines over the record fine the Obama administration Justice Department levied on JPMorgan Sachs — $13 billion – for helping cause the Great Recession through its financial finagling, DOJ took even more drastic action against another financial player.  It shut down a major hedge fund to outside investors.

In a settlement early in November, SAC Capital pled guilty to insider trading and promised to pay $1.8 billion in penalties.  But the settlement bans SAC from managing money for outside investors.

From now on, the fund will essentially manage only the $7 billion personal fortune of Steven Cohen, SAC’s owner and top exec.  Cohen will likely enjoy his fortune in peace.  Prosecutors may still file criminal charges against him, but they’ve ruled out a long-jail-time racketeering case.

The guilty plea from SAC they’ve extracted instead, complains New Yorker analyst John Cassidy, “perpetuates the myth” that corporate abstractions “rather than flesh-and-blood humans are responsible for financial wrongdoing.”