Global inequality is at its lowest since 1875
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Inequality is gauged according to the Gini index: whereby inequality is measured on a scale from 0 (no inequality) to 100 (maximum inequality).
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White-collar workers walk on a crosswalk in Tokyo on April 3, 2017. (AFP)
In a report for Foreign Affairs, Branko Milanovic notes that global inequality saw a remarkable decrease in this century which is a reflection of diminishing US hegemony.
Inequality is gauged according to the Gini index: whereby inequality is measured on a scale from 0 (no inequality) to 100 (maximum inequality). Inequality decreased from 69 back in 2000 to 60 in 2018, and presently it's even lower.
A nuance to point out is that global inequality is assessed as bipartite: inequality within countries and inequality between countries.
Read more: Income inequality spikes in Greece: report
Inequality within countries has spiked from 7 in the 1990s to 13 today. In parallel, inequality between countries plunged from 63 in 1988 to 47 in 2018.
This dynamic stands in contrast to the status of inequality during the Cold War: when inequality between countries was rising, but inequality within countries was falling dramatically.
US standards of wealth are decreasing in comparison to general standards. In 2018, in correspondence to every 100 Americans earning more than the median US income, 25 people were earning that much. However, during the next three decades, Chinese people earning more than the US median income will surpass that of Americans who do.
Check out: Richest 1% = 2/3 of all new wealth since 2020
Back in January, Oxfam urged for quick action to address a post-Covid widening in global inequality after showing that the richest 1% have collected nearly two-thirds of the additional wealth amassed since the start of the pandemic.
The charity stated in a report released to coincide with the annual gathering of the global elite at the World Economic Forum in Davos that the wealthy had collected $26 trillion in new wealth up to the end of 2021. That accounted for 63% of total new wealth, with the remaining 99% of people receiving the remainder.
For the first time in a quarter-century, the rise in extreme wealth is being followed by an increase in extreme poverty and is calling for higher taxes on the super-rich, Oxfam reported.
Policies implemented to mitigate the economic impact of Covid 19, such as interest rate cuts and the money creation process known as quantitative easing, increased the value of property and shares, which are typically owned by the wealthy.
According to the report, each billionaire received over $1.7 million for every $1 of additional global wealth earned by a person in the bottom 90% during the last two years. Despite minor declines in 2022, the aggregate fortune of billionaires climbed by $2.7 billion each day. The pandemic gains followed a decade in which the number and wealth of billionaires had surged.
