A shocking article in the Washington Post indicated that the 2017 “World Inequality Report” found that the richest 1 percent of the population received 27 percent of the world’s income between 1980 and 2016. The bottom 50 percent, by contrast, got only 12 percent. I suggest you have a look at the World Inequality Report for yourselves. I thought I’d share some highlights with you here, as well.
The countries with the greatest income disparity remain in the Middle East, sub-Saharan Africa, and Brazil. Nevertheless, it is the increase in income disparity in the United States that is especially noticeable. In 1980, Western Europe and the United States had similar levels of inequality, but today the top 1% has 12% of the income share in Western Europe, while the US top 1% has 20% of the income share, and the US bottom 50% income share decreased from more than 20% in 1980 to only 13% in 2016.
What has caused this glaring inequality in the United States?
- massive educational inequalities
- a tax system that grew less progressive
- the unequal ownership of capital
Capital can be either privately or publicly owned. National wealth is a combination of both public and private wealth. Since 1980, very large transfers of public to private wealth occurred in nearly all countries. While national wealth has substantially increased, public wealth is now negative or near zero in rich countries. This limits the ability of governments to address inequality, and has important implications for wealth inequality among individuals.
How can we change this downward spiral?
- tax progressivity to combat rising income and wealth inequality at the top
- a global financial register recording the ownership of financial assets would deal severe blows to tax evasion, money laundering, and rising inequality
- equal access to education
- well-paying jobs
Reducing global income and wealth inequality requires important shifts in national and global tax policies, educational policies, corporate governance, and wage-setting policies. Data transparency is also essential.
These findings are supported by similar data from the Bloomberg Billionaires Index, which tracks and ranks the world’s 500 richest people. Bloomberg’s findings provide yet another indication that massive accumulation of wealth at the top of the economic ladder leads to spiraling inequality, as shown by the “World Inequality Report”.
We need to reevaluate what is important in our society, and make some big changes. It is shameful that Europe can manage to give its citizens decent lives while the United States, with even more resources, has regressed toward barbarity. Success should be measured by a person’s achievements, rather than by the wealth they’ve accumulated.
Copyright © 2018 Teresa Chupp. All rights reserved.