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This is America in 2006:

The chief executive of Wal-Mart Stores, H. Lee Scott Jr., made more than $15 million last year in cash, stock and options, according to the company's annual report, an amount equivalent to roughly 850 times the pay of Wal-Mart's average "associate" tending to shoppers on a superstore floor. Mr. Scott isn't even at the top of the income-disparity league. Bruce E. Karatz, the former chief executive of the homebuilder KB Home, made $150 million last year, according to the Corporate Library, a research firm. According to government statistics, a residential construction worker makes less than one four-thousandth of that. [Note: In 2000, the share of national income reaped by the top 1 percent of taxpayers reached 16.5 percent, its highest level since 1936, and higher than that of the next 4 percent of taxpayers combined]

A recent article in the NY Times by Eduardo Porter discusses whether this is good for the country, from a purely economics standpoint:

Like any other difference in prices, economists say, income inequality allows people and companies to better allocate investments of money and effort. Pay differences encourage the best and brightest into the most profitable lines of work, and the most profitable companies to hire them. Inequality, according to this view, provides an incentive to work extra hard to come out on top.

True enough, but how much is enough, and is the system rigged so that the worker at the bottom stands no chance of ever acheiving that ultra-rich payout of H. Lee Scott?

"Clearly, perfect egalitarianism wouldn't lead to much effort or output," said Lawrence Katz, an economist at Harvard. "If you're just talking about making the pie as big as we could, it is not clear what level of inequality is best. If the growth in inequality is just about improving incentives, it's gone beyond what looks necessary. I don't think the added incentive of earning $100 million over $50 million is very different than the incentive of making $10 million over $5 million.�

And finally, there's this (which makes the most sense):

Richard Freeman and Alexander Gelber, a Ph.D. candidate in economics at Harvard, recently ran an experiment to figure out how inequality affects workers' efforts. They gave three groups of participants puzzles to solve and rewarded them in different ways.

The first group, in which everyone received the same reward, regardless of performance, didn't solve many puzzles. The group in which the best maze solver got all of the rewards - and no one else got anything - didn't do too much better. The group that had a sliding scale of rewards, based on performance, did the best.

Yet the most interesting result of Mr. Freeman's experiment was not about maximizing output. In an unexpected twist, some subjects of the test found ways to rig the system. Few did so when the rewards were spread in an egalitarian way. But when the rewards gave participants an incentive to compete, they also provided a powerful inducement to cheat.

Note this sentence: "When the rewards were spread in an egalitarian way, few participants rigged the system to win more."

This is why a more egalitarian society is the more healthy society.

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