When global inequalities rise

The World Inequality Lab published a shocking assessment of global inequalities in their 2018 report on the matter. It revealed an increasing wage gap and growing disparities in estate acquisition worldwide since 1980. The report of course, began by pointing out the extent to which inequality is a multidimensional and complex phenomenon, perhaps in a sense even inevitable. “However, we are convinced, continue the authors, that if this exacerbation of inequalities is not monitored and found a solution to, it could lead to all kinds of political, economic and social catastrophes”.

Based on an innovative method that combines several databases each gathering information on nationally declared wages and estate, the authors have drawn an indisputable conclusion: the disparities in salaries have increased in every region of the world over the past ten decades, but at different paces.

The portion of national revenue attributed to the top 10% of highest earners is of 37% in Europe, 41% in China and 46% in Russia. The highest inequalities among the developed countries are found in the United States and Canada combined.

Although wage inequalities have rapidly increased in the Unites States, China, India and Russia since the 1980s, they have remained more moderate in Europe. Regarding the countries of the Middle East, in sub-Saharan Africa or even Brazil, the wage inequalities have (in appearance only) remained relatively stable. The reason being that the situation of seemingly stable inequalities could be explained by the simple fact that these three regions in the world have never known an egalitarian regime uprising. They were inegalitarian yesterday and they remain inegalitarian today.

How are these inequalities reflected at the transnational level? Due to the significant development in Asia (India and China), half of the global population has gained an increase in salary. However, when looked at more closely, the richest 1% have acquired 27% of the total global growth since the beginning of the 80s, while the first five deciles (50% of which are the poorest) gained barely 12%. In between these two extremes, there are so-called middle classes who, at the global level, have become poorer.

Read the executive summary here