Why does Economic Inequality Matter?

Recently I read through Harry Frankfurt's new book, On Inequality, the two main theses of which are that inequality as such (whether income, wealth, or of some other sort) is, in itself, morally irrelevant, and that what really matters is that everyone have enough.  Not surprisingly, the book is carefully argued, yet I remain unconvinced, and I want to take a minute to think about why.

I won't summarize the argument of the book.  Suffice it to mention just one consideration Frankfurt puts forward over and over again.  Suppose that I have enough money that, while I can't have everything I want, I am comfortable and never want for anything important, like food or healthcare or money to pay for my children's education, and suppose you have twice as much.  In this and like cases, Frankfurt points out, it is not clear that the mere fact that you have more money than I do entails that there is anything amiss here.

This argument seems plausible, so far as it goes.  I think Frankfurt is right to say that inequality is morally irrelevant in this case and others relevantly like it.  But I am not sure that it shows that there is nothing amiss in the staggering levels of economic inequality we observe today in America and globally.  (If the word "staggering" seems excessive to you, take a look at this, this (from which I pulled the chart below), this, and the first chart in this article.)  It seems to me and, apparently, also to many others, that something rankles in the fact so few have so much in a country and a world where so many have so little.  But if Frankfurt is right--as he seems to be--that inequality as such is morally irrelevant at least in cases like the one I mentioned in the last paragraph, what is it that rankles?   Why exactly does economic inequality matter?

Wealth inequality in the US.  Notice that the top 1% own more wealth than the bottom 90% combined.  Likewise for the top 5% versus the bottom 95%.

Of course, increases in inequality may well have effects worth worrying about.  For instance, income inequality appears to be strongly correlated with the increasing politic polarization we've seen in the US in recent years, and there even appears to be some reason to think the increase in inequality we've seen during the same period played a part in bringing about the increases in polarization (source).  That is really interesting, but--to be clear--I don't want to focus on that here.  Instead, like Frankfurt I want to ask:  is there anything wrong with economic inequality just by itself, whatever its effects?

Near the end of the book, Frankfurt suggests inequality might be of concern in some cases because it signals a lack of respect (pp. 76-77).  I think that's plausible, but the suggestion needs further elaboration Frankfurt doesn't give it.  What reason might those with relatively low incomes or relatively little wealth have to feel disrespected?

Perhaps it is the fact that they are struggling to meet their basic needs even as others have many times what they need even to live very satisfying lives.  Frankfurt is right that, in general, it is a terrible thing when people don't have enough to live reasonably satisfying lives, of course.  But what he seems to miss is that the fact that some people have so much less than they need is made worse than terrible by the fact that their neighbors could so easily help but don't.  When that happens, a situation that was already terrible becomes appalling, and those who are struggling might reasonably feel that they are not being given the respect they deserve merely in virtue of the fact that they are human beings.  That is, I am suggesting, if one person is struggling to meet her basic needs, and another has vastly more than he needs by any reasonable measure, the first is entitled to some of what the second has, and the fact that they are not getting it might reasonably be taken as a sign of disrespect.

That is one possible answer, anyway; here's another.  It seems clear that a human being can only work so hard--at some point, you have to eat and sleep, at least.  So consider a situation in which two people are each working as hard as a human being can possibly work but are earning different amounts of money.  What could justify this?  Perhaps the value of the work they're doing.  If one is working to create an even higher-definition TV and the other is trying to cure cancer, for example, it seems appropriate that the latter earn more than the former.  But there are limits here.  For one thing, it is not plausible that any jobs employers are actually willing to hire people to do are so useless that the people who do them don't deserve to make enough to get by. Moreover, it is hard to see how any kind of work could be so valuable that people who do it deserve to make 300 times what people doing some other kind of work make.  And yet this is precisely what is happening in the US.  Today many full-time workers struggle to get by (for instance, adjunct professors who have to rely on food stamps), and some American CEO's make over 300 times what the average worker does, up from about 20 times in 1965 (source).  And so, it can seem, people's incomes are not in sync with the value of the work for which they are paid.  This state of affairs offends meritocratic sensibilities and does so, moreover, precisely because of the magnitude of the inequalities in play.  (Of course, things are even worse if we look at the broader global picture, in which 2.8 billion people live on less than $2/day.)

What do others think?  Have I put my finger on the problems with economic inequality?  Have I missed something?  I'm genuinely asking here:  I'm not sure myself whether or not I buy all this, and I'd be interested to hear your thoughts.