system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: What are the consequences of a large income gap?

What are the consequences of having a large gap between the highest wage earners and the lowest wage earners?
gpt
Look at some of the banana republics around the world.

You eventually get to the point where a handful of families own everything  up to and including the government. They then turn the government to exclusively serving their interest to the detriment of the rest of the country. Forget that whole "a rising tide lifts all boats" shit, it doesn't work that way. What actually happens is that life for everyone except these handful of families sucks.

The second problem is that your nation as a whole is worse off: Instead of a large portion of your 300 mil people (US) working, inventing, getting educated, trying new ideas that succeed or fail those people eventually get slowly shut out. You can't do much to contribute to the country as a whole when you are a dead broke uneducated minimum wage employee with no savings to do anything with. The best idea in the world will do you no good if you're working at Micky Ds. So instead of several hundred million brains working you get a few dozen. Ask the Soviets how that tends to work out.

Finally in a consumer based economy like ours you need a pretty good spread or the whole system will eventually collapse. If everyone makes Starbucks wages, no one will be able to buy Starbucks $5 lattes. If that happens Starbucks goes out of business. Then there are even more unemployed people. If you don't pay working stiffs enough the consumer demand that every single business dries up. Those businesses go out of business. More unemployed people. Even less consumer demand. It's a feedback loop that if unchecked can wind you up in Great Depression territory.