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Economic Inequality in Later Life
posted 07.02.2018

By Karen D. Lincoln

Levels of economic inequality—encompassing inequality in the distribution of income and wealth—have hit unprecedented heights and appear to be rising. In 2014, the average income for adults in the United States was $64,600. How­ever, this average obscures a great deal of hetero­geneity (Piketty, Saez, and Zucman, 2018). The bottom 50 percent of adults earned on average $16,200 per year, while the middle 40 percent earned roughly the same income as the U.S. aver­age. In stark contrast, the top 10 percent received 47 percent of all U.S. income—$304,000, which is 4.7 times the national average, while the top 1 per­­cent of adults earned $1,300,000—twenty times the national average income. Today, the top 1 per­­cent takes home more than 20 percent of all in­­come in the United States.
The extreme disparity in income and wealth distribution has a real and distinct impact on older adults. According to the latest data, more than 7 million older adults are living below the Federal Poverty Line, per the Supplemental Pov­erty Measure (Cubanski et al., 2018). This number will increase to 72 million by 2030. A 2016 study by the Kaiser Family Foundation found that half of all Medicare beneficiaries have incomes below $26,200 per year; while 25 percent have incomes below $15,250. Only 5 percent have incomes above $103,450 (Jacobson et al., 2017).
Studies also show that economic insecurity is particularly concentrated among older women of color. In 2013, African American single women between ages 65 and 84 had a median wealth of $55,700, compared to $187,000 for non-Hispanic white single women in the same age category (Sullivan and Meschede, 2016). Among educated women, older, single African American women with a college degree have a mere $11,000 in wealth, which is the lowest of any women in that age range and is in stark contrast to the $384,400 in median wealth among single white women with a bachelor’s degree (Zaw et al., 2017). This wealth gap is present across all age categories and begins much earlier in the life course (Sulli­van and Meschede, 2016).
Aging is a stratified process that reflects the inequalities that structure our life chances from birth onward. Barriers to accessing wealth-building opportunities, wages, and workplace benefits, as well as experiencing household responsibilities that restrict labor force partici­pation by race and by gender are circumstances that converge, accumulate, and lead to aston­ishingly high rates of poverty and economic inequality in later life. While some of these wealth-building opportunities are based upon economic factors, such as income and wages, others are based upon social factors.
Social inequality has economic implications. For example, racial segregation in the United States has been slowly declining over the past four decades, yet it remains very high. At the same time, residential segregation by income, which was very low in 1970, has risen sharply (Logan, 2011; Reardon and Bischoff, 2011; Watson, 2009). One study reported that poor whites tend to live in more affluent neighborhoods than do middle-class African Americans and Latinos, which means that these groups are more likely to con­tend with lower-quality schools, higher crime, less access to resources, and greater social problems, all of which structure economic opportunities for children in the future. The gap separating African Americans and Latino neighborhoods from white neighborhoods persists up and down the income ladder (Reardon, Fox, and Townsend, 2015).
Consequently, racial economic inequality continues to be strikingly high. A recent Pew re­­search analysis of the Current Population Survey found that racial gaps in income and earnings, with white households earning more than their black counterparts, remained largely constant or even widened between 1967 and 2015 (Bialik and Cilluffo, 2017; Gittleman and Wolff, 2004). For example, in 2014, the median African Ameri­can and Latino household incomes were about $43,300, while non-Hispanic white household income was about $71,300 (Pew Research Cen­ter, 2016).
The return on income and education also dif­fers by race. On average, household heads with higher levels of formal education tend to have higher household incomes. However, the black-white gap in income occurs across all educa­tional levels. For example, the median adjusted household income among African American householders with at least a bachelor’s degree was $82,300 in 2014, while the income of col­lege-educated non-Hispanic white householders was $106,600.
Clearly, more studies are needed to under­stand the causes and consequences of inequal­ity. However, there is growing recognition that economic inequality is due to the convergence of a multitude of factors—political, social, and eco­nomic—that intersect to contribute to the prob­lem. Both past and present racism and sexism, lack of healthcare access and educational oppor­tunities, environmental risks and hazards, and more all contribute to inequality—particularly among those who are affected, negatively or posi­tively, by more than one of these interconnected issues. For older adults, how they experience in­­equality as they age is really the result of a life­time of experiences.
To understand the persistence of economic inequality, the individual determinants of un­­equal treatment of social groups must be exam­ined. For example, studies that focus on social determinants of inequality highlight the unequal distribution of resources that promote economic stability, such as access to education, employ­ment, and housing. These social determinants, however, are determined by a broader set of fac­tors that structure and shape the contexts in which people live, work, and age. It is in the broader societal factors—e.g., capitalism, racism, and patriarchy—whereby income disparities take root, inequalities grow, and inequities reproduce.
In this Summer 2018 issue of Generations, the twelve articles that follow explore societal and social factors that create and maintain economic inequality among older adults. The authors rep­resent the disciplines of social work, gerontology, environmental science, economics, neuropsy­chology, and sociology. Various forms of inequal­ities are investigated based upon race, ethnicity, gender, sexual orientation, and migratory status. Reflecting the interdisciplinary nature of these contributing authors, a broad range of societal and social factors are considered as potential determinants of economic inequality across the life course.
Introduction of Feature Articles
Is the distribution of resources fair? This is a question of equity in income and wealth. Is the distribution of the population within economic categories the same regardless of social position? This is a question of equality, and the metric we use to measure progress toward achieving eco­nomic equity and eradicating inequities. Equity is the means. Equality is the outcome. Inequity, inequality, and disparities often are used inter­changeably. However, these concepts are not the same, and the difference between them is crucial for understanding and addressing economic in­­equality in the United States.
The first feature article by Takeuchi and col­leagues highlights the distinction between equity and equality and reveals the complexity of these two constructs. The authors argue that most research on equity and equality focuses on outcomes that demonstrate group differences in valued resources, such as pay, wealth, and educa­tion. But these studies are limited to the extent that they explain why inequalities persist over time. Accordingly, Takeuchi and colleagues spot­light mechanisms that constrain opportunities for some social groups, and offer approaches for advancing research, policy, and practice to address inequity and inequality in our society.
A growing body of literature posits that more unequal societies have more polluted and degraded environments, perhaps helping to explain why more unequal societies are often less healthy. The relationship between environ­mental quality and social inequality along the axes of income, wealth, political power, race, and ethnicity suggests that more attention should be paid to the interplay between inequality, the en­­vironment, and health, including initiating more studies that elucidate causal pathways and points of intervention.
The next set of feature articles highlights the mechanisms linking unequal environments to economic inequality and the well-being of indi­viduals, communities, and society. Ailshire and García document the link between race, ethnic­ity, socioeconomic position, and disadvantaged environments. They argue that unequal environ­ments limit the opportunities for older adults to lead healthy, active, and engaged lives. Pastor and Morello-Frosch raise the argument that reducing economic and social inequality may not only help those who are most exposed to health-damaging pollutants in their neighborhoods, but also may improve environmental conditions for all.
Multiple identities such as race, ethnic­ity, class, and gender intersect and have multi­ple effects on one’s ability to participate in the labor market, to achieve economic security, and to plan for old age. The next set of feature arti­cles highlights the causes and consequences of economic insecurity for older women and older adults of color.
Moore and Ghilarducci describe the eco­nomic status of older women within the context of societal inequity, stratification, and inter­sectionality; they highlight the importance of understanding economic inequality within a framework that takes into account the intersec­tions of various social identities and the societal determinants of inequity (e.g., capitalism, rac­ism, patriarchy), as it is the societal determinants that determine the laws, norms, and policies that create and maintain inequality over time. Angel and Angel continue this conversation by discuss­ing the implications of lifelong income inequality for individuals, families, and society. Poor older adults are expensive. The Angels argue that a lifetime of low earnings, combined with demo­graphic shifts and the changing role of fami­lies, has a social cost that results in an increased burden to states for Medicaid support and an increased need for innovative solutions to long-term care for poor elders.
The economy of the United States becomes morerobust as the health and well-being of its citizens improve. Improving the health of all Americans can directly result in economic growth, partly because more people are more productive in the labor force. However, racism and discrimination hamper access to oppor­tunity. Studies consistently show that racism has deleterious consequences for health. How­ever, bias based upon race results in an income gap that costs the United States $1.9 trillion per year, significantly slashing the country’s wealth. Addressing factors such as healthcare inequities, unjustified incarceration disparities, and fewer employment and education opportunities would generate 12 percent more annual U.S. earnings. America’s changing demographics highlight the urgency of addressing bias based upon race, gen­der, and sexual orientation and its impact on people’s health, wealth, and our nation’s eco­nomic growth.
The next set of articles explores the unequal impact of mass incarceration, and the impli­cations of racial discrimination and economic inequality upon health and aging among racial, ethnic, and sexual minorities. Cox encourages us to think about racial health disparities and aging within the context of mass incarceration. Criminal justice policies and practices result in the unequal impact of mass incarceration that disadvantages individuals based on race, ethnic­ity, and class. African American men make up 40 percent of the prison population compared to 6 percent of the population of the United States. Thus, health, aging, and wealth in this popula­tion and others disproportionately represented among those incarcerated cannot be fully under­stood without considering the causes and conse­quences of incarceration, and how these impact individuals, families, and communities.
Gorman and Oyarvide highlight the diver­sity among older adults in the United States in an article focused on bisexual older adults. Their piece reveals heterogeneity among LGBT older adults and identifies a socioeconomic pro­file among older bisexual men and women that is less positive than those of gay, lesbian, or het­erosexual older adults. In doing so, the authors encourage us to consider how socioeconomic sta­tus differences shape the health and aging tra­jectories of sexual minority older adults and the implications for their financial security and long-term care.
Finally, Nguyen highlights the historically important role of the African American church for filling the gap left by limited access to formal mental health services by socially and economi­cally marginalized groups. Empirical evidence shows that individuals with higher socioeco­nomic positions have lower prevalence of mental health disorders due to the protective nature of income, education (Gaines, 2007), and employ­ment (Lincoln and Chae, 2010; Lincoln et al., 2011). If the causal order is reversed, studies show that mental health disorders predict edu­cational attainment, labor force participation, income, and earnings.
For example, persons with psychiatric dis­orders are more likely to have difficulty finding a job, retaining a job, and have reduced earn­ings while employed (Kessler et al., 2008). Thus, social resources that can mitigate the relation­ship between mental health and financial inse­curity are crucial for individuals who might otherwise be disadvantaged due to their social position. Nguyen’s article highlights the expo­sure of African Americans to racial discrimi­nation and the toll this exposure can take on older adults’ well-being. In lieu of access to for­mal mental health services among older Afri­can Americans, the author demonstrates the role of the church for providing informal sources of support that can protect congregants from seri­ous mental illness associated with exposure to social stressors like racial discrimination.
Introduction of Program Spots
Economic inequality is tied to societal and social determinants indexed by inequalities in economic stability, neighborhood resources, hazardous toxic exposures, and opportunity structures. Thus, efforts to end economic inequality require disruptive, life-course interventions at the indi­vidual, community, and policy levels. The final set of articles follows a “program spot” format that serves to highlight four initiatives designed to address economic, social, and environmental inequity in ways that can affect outcomes across the life course, while also generating knowledge and policy ideas of local and national impor­tance. These shorter pieces provide examples of how to address social and economic inequality with programs that build economic assets during childhood, increase health literacy and commu­nity engagement among African Americans in urban neighborhoods, and increase our knowl­edge about the intersection between race, place, and income to identify important points of policy interventions at local and national levels.
The persistent difference in wealth has con­sequences for child outcomes in the United States, particularly for the large and growing population of non-white children. Without the potential buffer that wealth provides in times of unemployment and emergency expenses, fam­ily well-being can suffer. When children grow up in households that have no wealth and face eco­nomic insecurity, they may experience signifi­cant stress and have limited opportunities for upward mobility.
In the first program spot, Shanks describes different approaches to help low-income, low-wealth households build assets that could im­­prove near-term economic security, and help children succeed academically and achieve future economic success. The programs and policies described by Shanks have the poten­tial to increase financial capability and promote pathways toward economic mobility, which can lessen economic disparities across the life course and reduce economic inequality in later life.
Low health literacy is linked to a wide range of poor health-related outcomes, including low use of preventive medical services, uncontrolled chronic health conditions, delays in accessing or forego­ing needed care, difficulty finding a provider, lack of a usual source of care, and mortality (Berkman et al., 2011). Thus, health literacy—an individual’s ability to access, process, and understand basic health information and services needed to make appropriate health decisions—is an important determinant of health inequities across groups.
Health literacy is determined by individual and community-level socioeconomic status, and connections with others through work, civic engagement, and social networks (Rikard et al., 2016). There is a social and economic gradient in health literacy such that low health literacy is more prevalent among older adults, racial and ethnic minorities, and groups of low socioeco­nomic status (Rikard et al., 2016). However, the benefits of health literacy interventions appear greater for racial and ethnic minorities and indi­viduals with low incomes than for those with higher incomes (Miller, 2016).
Given the link between economic inequality, health literacy, and poorer health outcomes, pro­grams that increase health literacy among racial and ethnic minority and low-income populations can help close the gap between economic insecu­rity and heath disparities. The next two program spots feature academic-community initiatives designed to help close the health gap.
In my program spot article, I share key suc­­­cesses from an outreach and engagement pro­­­gram that I founded at the University of South­­ern California. Advocates for African American El­­ders (AAAE) was created to increase access to health information and resources to older resi­dents in South Los Angeles, a community that is underserved, under-resourced, and economically disadvantaged relative to other communities in Los Angeles County. AAAE increases health lit­eracy for older African Americans and their fam­ilies by partnering with community stakeholders, including organizations, advocates, and residents, to conduct community-partnered participatory research, to raise awareness, and to increase knowledge about chronic health conditions, 
mental health disorders, and the available health-promoting resources in the community.
Gluck, Shaw, and Hill describe their unique university-community partnership that pro­motes brain health among African American older adults in the greater Newark, New Jersey, area. The African-American Brain Health Initia­tive combines research, education, and commu­nity engagement to increase brain health liter­acy. African Americans have a disproportionate risk for Alzheimer’s disease, memory loss, and other age-related brain health problems. How­ever, less than 5 percent of this population is in­­cluded in Alzheimer’s disease pre­­­­­vention studies or clinical trials. Gluck and colleagues offer out­reach and engagement strategies that have con­tributed to the success of their educational and outreach programs, and their engagement of African Americans in research for more than a decade.
The fourth program spot by Dearing, McRoy, and Mulrean features a young, dynamic initia­tive that brings together researchers from Bos­ton College and beyond with practitioners and policy makers to better address the root causes of social, economic, and environmental ineq­uity. To do this, Research in Social, Economic and Environmental Equity (RISE) faculty use research strategies to understand how race, place, and poverty intersect to impact the daily lives of individuals living in disadvantaged neighborhoods.
RISE explores the “basic tools of opportu­nity,” such as use of and access to transpor­tation and childcare and associated costs to families in time and money, to demonstrate how race, ethnicity, and income affect vulnerable families in practical ways. The goal of RISE is to use the tools of research to impact policies, to support the efforts of community-based organi­zations to change public assistance policies, and to help families and neighborhoods improve their own lives.
The inequalities that shape our opportunities from birth structure our final years. Advantages and disadvantages accumulate over the life course. In developing policies to address eco­nomic inequality and senior poverty, policy mak­ers, researchers, analysts, and advocates should better understand the conditions experienced by our country’s most vulnerable older adults throughout their lives. Age, race, gender, and place influence economic and social experiences and risks leading up to and in later life.
Addressing inequity in aging requires a life-course approach that includes targeted inter­ventions and policies at various points within the life course. The contexts in which we live powerfully affect our opportunities—regard­less of compositional differences in individual resources. Thus, policies targeting vulnerable elders should consider the role that inequality in neighborhoods, social networks, and opportuni­ties plays in creating, maintaining, and perpetu­ating economic inequality across the life span. Meeting the challenge of eliminating economic inequity requires examining the “root causes”; focusing on what can be seen as upstream inter­ventions and primary prevention; and addressing unequal distribution of power, income, goods, and services.
As the Race Matters Institute (2014) says, “The route to achieving equity will not be accom­plished through treating everyone equally. It will be achieved by treating everyone equitably, or justly, according to their circumstances.”
Karen D. Lincoln, Ph.D., M.S.W., M.A., is associate professor in the Suzanne Dworak-Peck School of Social Work at the University of Southern California.
This article is taken from the Summer 2018 issue of ASA’s quarterly journal, Generations, an issue devoted to the topic of economic & social inequality in an aging America. ASA members receive Generations as a membership benefit; non-members may purchase subscriptions or single copies of issues at our online store.
Bialik, K., and Cilluffo, A. 2017. 6 Facts About Black Americans for Black History Month. Retrieved March 3, 2018.
Berkman, N. D., et al. 2011. “Low Health Literacy and Health Out­comes: An Updated Systematic Review.” Annals of Internal Medi­cine 155(2): 97–107.
Cubanski, J., et al. 2018. How Many Seniors Are Living in Poverty? National and State Estimates Under the Official and Supplemental Pov­erty Measures in 2016. Menlo Park, CA: Kaiser Family Foundation.
Gaines, J. S. 2007. “Social Cor­relates of Psychological Distress Among Adult African American Males.” Journal of Black Studies 37(6): 827–58.
Gittleman, M., and Wolff, E. N. 2004. “Racial Differences in Pat­terns of Wealth Accumulation.” The Journal of Human Resources 39(1): 193–227.
Jacobson, G., et al. 2017. Income and Assets of Medicare Beneficia­ries, 2016-2035. Menlo Park, CA: Kaiser Family Foundation. Retrieved January 26, 2018.
Kessler, R. C., et al. 2008. “Indi­vidual and Societal Effects of Men­tal Disorders on Earnings in the United States: Results from the National Comorbidity Survey Rep­lication.” American Journal of Psy­chiatry 165(6): 703–11.
Lincoln, K. D., and Chae, D. H. 2010. “Stress, Marital Satisfaction, and Psychological Distress Among African Americans.” Journal of Family Issues 31(8): 1081-105.
Lincoln, K. D., et al. 2011. “Correlates of Psychological Distress and Major Depressive Disorder Among African American Men.” Research on Social Work Practice 21(3): 278–88.
Logan, J. R. 2011. Separate and Unequal: The Neighborhood Gap for Blacks, Hispanics and Asians in Metropolitan America. US2010 Project. New York: Russell Sage Foundation; Providence, RI: Brown University.
Miller, T. A. 2016. “Health Literacy and Adherence to Medical Treat­ment in Chronic and Acute Illness: A Meta-analysis.” Patient Educa­tion and Counseling 99(7): 1079-86.
Pew Research Center. 2016. On Views of Race and Inequality, Blacks and Whites Are Worlds Apart. Retrieved December 6, 2017.
Piketty, T., Saez, E., and Zucman, G. 2018. “Distributional National Accounts: Methods and Estimates for the United States.” The Quar­terly Journal of Economics 133(2): 553-609.
Race Matters Institute. 2014. “Racial Equality or Racial Equity? The Difference it Makes—Advanc­ing Racial Equity.” Baltimore, MD: Race Matters Institute. Retrieved October 16, 2017.
Reardon, S., and Bischoff, K. 2011. Growth in the Residential Segrega­tion of Families by Income, 1970–2009. US2010 Project. New York: Russell Sage Foundation; Provi­dence, RI: Brown University.
Reardon, S. F., Fox, L., and Townsend, J. 2015. “Neighborhood Income Composition by Household Race and Income, 1990–2009.” Annals of the American Academy of Political and Social Science 660(1): 78–97.
Rikard, R. V., et al. 2016. “Examin­ing Health Literacy Disparities in the United States: A Third Look at the National Assessment of Adult Literacy (NAAL).” BMC Public Health 16(1): 975.
Sullivan, L., and Meschede, T. 2016. “Race, Gender, and Senior Economic Well-being: How Finan­cial Vulnerability Over the Life Course Shapes Retirement for Older Women of Color.” Public Pol­icy & Aging Report 26(2,1): 58–62.
Watson, T. 2009. “Inequality and the Measurement of Residential Segregation by Income in Ameri­can Neighborhoods.” Review of Income and Wealth 55(3): 820-44.
Zaw, K., et al. 2017. Women, Race, and Wealth. Durham, NC: Samuel DuBois Cook Center on Social Equity and Insight Center for Com­munity Economic Development.

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