Is economic inequality as bad as we perceive it to be

 

Is economic inequality as bad as we perceive it to be

Economic Inequality

Income disparities are so pronounced that America’s top 10 per cent now average more than nine times as much income as the bottom 90 per cent, according to data analyzed by UC Berkeley economist Emmanuel Saez. Americans in the top 1 per cent tower is stunningly higher. They average over 39 times more income than the bottom 90 per cent. But that gap pales in comparison to the divide between the nation’s top 0.1 per cent and everyone else. Americans at this lofty level are taking in over 196 times the income of the bottom 90 per cent.

The U.S. income divide has not always been as vast as it is today. In response to the staggering inequality of the Gilded Age in the early 1900s, social movements and progressive policymakers fought successfully to level down the top through fair taxation and level up the bottom through increased unionization and other reforms.

But beginning in the 1970s, these levellers started to erode and the country returned to extreme levels of inequality. According to data analyzed by UC Berkeley economist Emmanuel Saez, the ratio between the top 0.1 per cent and the bottom 90 per cent reached Gilded Age levels in the years preceding the 2008 financial crisis. inequality.org

 

Economic Inequality is Trending Upwards

  • A child born in one of the countries with the worst health is 60-times more likely to die than a child born in a country with the best health. In several African countries, more than one out of ten children born today will die before they are five years old. In the healthiest countries of the world – in Europe and East Asia – only 1 in 250 children will die before he or she is 5 years old.
    • Here is the world map showing child mortality rates around the world.

  • Education: In the countries where people have the best access to education – in Europe and North America – children of school entrance age today can expect 15 to 20 years of formal education. In Australia, which is an outlier, school life expectancy is 22.9 years. Children entering the school at the same time in countries with the poorest access to education can only expect 5 years. And additionally, children tend to learn much less in schools in poorer countries, as we explained before.

 

Current global inequality in standard of living

  • Income: If you look at average incomes and compare the richest country – Qatar with a GDP per capita of almost $117,000 – to the poorest country in the world – the Central African Republic at $661 – then you find a 177-fold difference. This is taking into account price differences between countries and therefore expressed in international-$ (here is an explanation). Qatar and other very resource-rich economies might be considered outliers here, suggesting that it is more appropriate to compare countries that are very rich without relying mostly on exports of natural resources. The US has a GDP per capita of int.-$54,225 and Switzerland of 57,410 international-$. This means the Swiss can spend in 1 month what people in the Central African Republic can spend in 7 years. Full Story

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