Economic inequality

[박대선]

Economic inequality

42 languages

• Article
• Talk

• Read
• Edit
• View history

Tools

•  
•  
•  
•  
•  
•  
•  
•  

•  
•  

•  
•  

From Wikipedia, the free encyclopedia

For the more general social form, see Social inequality.

For other uses, see Inequality.

"Rich and poor" redirects here. For other uses, see Rich and Poor.

Differences in national income equality around the world as measured by the national Gini coefficient as of 2018.[1] The Gini coefficient is a number between 0 and 100, where 0 corresponds with perfect equality (where everyone has the same income) and 100 corresponds with absolute inequality (where one person has all the income, and everyone else has zero income).

Global share of wealth by wealth group, Credit Suisse, 2021

Wealth disparity in major cities

Tents of the homeless on the sidewalk in Skid Row, Los Angeles

An affluent house in Holmby Hills, Los Angeles, roughly 12 miles from downtown (above)

There are wide varieties of economic inequality, most notably income inequality measured using the distribution of income (the amount of money people are paid) and wealth inequality measured using the distribution of wealth (the amount of wealth people own). Besides economic inequality between countries or states, there are important types of economic inequality between different groups of people.[2]

Important types of economic measurements focus on wealth, income, and consumption. There are many methods for measuring economic inequality,[3] the Gini coefficient being a widely used one. Another type of measure is the Inequality-adjusted Human Development Index, which is a statistic composite index that takes inequality into account.[4] Important concepts of equality include equity, equality of outcome, and equality of opportunity.

Whereas globalization has reduced global inequality (between nations), it has increased inequality within nations.[5][6][7][8] Income inequality between nations peaked in the 1970s, when world income was distributed bimodally into "rich" and "poor" countries. Since then, income levels across countries have been converging, with most people now living in middle-income countries.[5][9] However, inequality within most nations has risen significantly in the last 30 years, particularly among advanced countries.[5][6][7][8] In this period, close to 90 percent of advanced economies have seen an increase in income inequality, with over 70% recording an increase in their Gini coefficients exceeding two points.[5]

Research has generally linked economic inequality to political and social instability, including revolution, democratic breakdown and civil conflict.[5][10][11][12] Research suggests that greater inequality hinders economic growth and macroeconomic stability, and that land and human capital inequality reduce growth more than inequality of income.[5][13] Inequality is at the center stage of economic policy debate across the globe, as government tax and spending policies have significant effects on income distribution.[5] In advanced economies, taxes and transfers decrease income inequality by one-third, with most of this being achieved via public social spending (such as pensions and family benefits).[5]

Measurements[edit]

Main articles: Income inequality metrics and List of countries by income equality

Share of income of the top 1% for selected developed countries, 1975 to 2015

In 1820, the ratio between the income of the top and bottom 20 percent of the world's population was three to one. By 1991, it was eighty-six to one.[14] A 2011 study titled "Divided we Stand: Why Inequality Keeps Rising" by the Organisation for Economic Co-operation and Development (OECD) sought to explain the causes for this rising inequality by investigating economic inequality in OECD countries; it concluded that the following factors played a role:[15]

• Changes in the structure of households can play an important role. Single-headed households in OECD countries have risen from an average of 15% in the late 1980s to 20% in the mid-2000s, resulting in higher inequality.
• Assortative mating refers to the phenomenon of people marrying people with similar background, for example doctors marrying other doctors rather than nurses. OECD found out that 40% of couples where both partners work belonged to the same or neighbouring earnings deciles compared with 33% some 20 years before.[16]
• In the bottom percentiles, number of hours worked has decreased.[16]
• The main reason for increasing inequality seems to be the difference between the demand for and supply of skills.[16]

The study made the following conclusions about the level of economic inequality:

• Income inequality in OECD countries is at its highest level for the past half century. The ratio between the bottom 10% and the top 10% has increased from 1:7 to 1:9 in 25 years.[16]
• There are tentative signs of a possible convergence of inequality levels towards a common and higher average level across OECD countries.[16]
• With very few exceptions (France, Japan, and Spain), the wages of the 10% best-paid workers have risen relative to those of the 10% lowest paid.[16]

A 2011 OECD study investigated economic inequality in Argentina, Brazil, China, India, Indonesia, Russia, and South Africa. It concluded that key sources of inequality in these countries include "a large, persistent informal sector, widespread regional divides (e.g. urban-rural), gaps in access to education, and barriers to employment and career progression for women."[16]

Countries by total wealth (trillions USD), Credit Suisse

World map of countries by the inequality-adjusted Human Development Index.

A study by the World Institute for Development Economics Research at United Nations University reported that the richest 1% of adults alone owned 40% of global assets in the year 2000. The three richest people in the world possess more financial assets than the lowest 48 nations combined.[17] The combined wealth of the "10 million dollar millionaires" grew to nearly $41 trillion in 2008.[18]

Oxfam's 2021 report on global inequality said that the COVID-19 pandemic has increased economic inequality substantially; the wealthiest people across the globe were impacted the least by the pandemic and their fortunes recovered quickest, with billionaires seeing their wealth increase by $3.9 trillion, while at the same time the number of people living on less than $5.50 a day likely increased by 500 million.[19] The 2022 Oxfam report said that growing economic inequality has been a factor in increased mortality rates during the pandemic, contributing to the deaths of 21,000 people on a daily basis, while the wealth of the world's 10 richest billionaires doubled.[20][21] The 2023 report stated that roughly two thirds of all new wealth went to the top 1% at the same time that extreme poverty has been increasing globally.[22] According to economist Joseph Stiglitz, the pandemic's "most significant outcome" will be rising economic inequality in the United States and between the developed and developing world.[23]

Wealth inequality in the United States increased from 1989 to 2013.[24]

According to PolitiFact, the top 400 richest Americans "have more wealth than half of all Americans combined."[25][26][27][28] According to The New York Times on July 22, 2014, the "richest 1 percent in the United States now own more wealth than the bottom 90 percent".[29] Inherited wealth may help explain why many Americans who have become rich may have had a "substantial head start".[30][31] A 2017 report by the IPS said that three individuals, Jeff Bezos, Bill Gates and Warren Buffett, own as much wealth as the bottom half of the population, or 160 million people, and that the growing disparity between the wealthy and the poor has created a "moral crisis", noting that "we have not witnessed such extreme levels of concentrated wealth and power since the first gilded age a century ago."[32][33] In 2016, the world's billionaires increased their combined global wealth to a record $6 trillion.[34] In 2017, they increased their collective wealth to 8.9 trillion.[35] In 2018, U.S. income inequality reached the highest level ever recorded by the Census Bureau.[36]

The existing data and estimates suggest a large increase in international (and more generally inter-macroregional) components between 1820 and 1960. It might have slightly decreased since that time at the expense of increasing inequality within countries.[37] The United Nations Development Programme in 2014 asserted that greater investments in social security, jobs, and laws that protect vulnerable populations are necessary to prevent widening income inequality.[38]

There is a significant difference in the measured wealth distribution and the public's understanding of wealth distribution. Michael Norton of the Harvard Business School and Dan Ariely of the Department of Psychology at Duke University found this to be true in their research conducted in 2011. The actual wealth going to the top quintile in 2011 was around 84%, whereas the average amount of wealth that the general public estimated to go to the top quintile was around 58%.[39]

According to a 2020 study, global earnings inequality has decreased substantially since 1970. During the 2000s and 2010s, the share of earnings by the world's poorest half doubled.[40] Two researchers claim that global income inequality is decreasing due to strong economic growth in developing countries.[41] According to a January 2020 report by the United Nations Department of Economic and Social Affairs, economic inequality between states had declined, but intrastate inequality has increased for 70% of the world population over the period 1990–2015.[42] In 2015, the OECD reported in 2015 that income inequality is higher than it has ever been within OECD member nations and is at increased levels in many emerging economies.[43] According to a June 2015 report by the International Monetary Fund (IMF):

Widening income inequality is the defining challenge of our time. In advanced economies, the gap between the rich and poor is at its highest level in decades. Inequality trends have been more mixed in emerging markets and developing countries (EMDCs), with some countries experiencing declining inequality, but pervasive inequities in access to education, health care, and finance remain.[44]

In October 2017, the IMF warned that inequality within nations, in spite of global inequality falling in recent decades, has risen so sharply that it threatens economic growth and could result in further political polarization. The Fund's Fiscal Monitor report said that "progressive taxation and transfers are key components of efficient fiscal redistribution."[45] In October 2018 Oxfam published a Reducing Inequality Index which measured social spending, tax and workers' rights to show which countries were best at closing the gap between the rich and the poor.[46]

The 2022 World Inequality Report, a four-year research project organized by the economists Lucas Chancel, Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, shows that "the world is marked by a very high level of income inequality and an extreme level of wealth inequality" and that these inequalities "seem to be about as great today as they were at the peak of western imperialism in the early 20th century." According to the report, the bottom half of the population owns 2% of global wealth, while the top 10% owns 76% of it. The top 1% owns 38%.[47][48][49]

Wealth distribution within individual countries[edit]

Main articles: List of countries by wealth per adult and Wealth distribution

The following table shows information about individual wealth distribution in different countries from a 2018 report by Crédit Suisse.[50] The wealth is calculated by various factors, for instance: liabilities, debts, exchange rates and their expected development, real estate prices, human resources, natural resources and technical advancements, etc.

[박대선]

https://en.wikipedia.org/wiki/Economic_inequality