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General Analysis on Inequality of Wealth and Income Distribution
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Inequality of Wealth and Income Distribution
Articles and Documents
2008 | 2007 | 2006 | 2005 | Archived Articles
Press Release: Pioneering Study Shows Richest Two Percent Own Half World Wealth (December 5, 2006)
The Helsinki-based World Institute for Development Economics Research of the United Nations University (UNU-WIDER) has released the most comprehensive study ever performed of personal wealth – as opposed to income. Based on data from 2000, the study finds that one percent of the world’s adults alone owned 40 percent of the world’s wealth, while the bottom half of adults in the world together owned less than one percent. Absurdly, many individuals in high-income countries incurring large mortgage and consumer debts are among the ‘poorest’ in terms of household wealth. Still, North America’s 6 percent of the world adult population accounted for 34 percent of world household wealth.
A Compendium of Inequality (October 2005)
The United Nations Development Program (UNDP) published the 2005 Human Development Report just a week before the Millenium+5 Summit. The release was intended to influence governments to promote a more incisive approach to development, aid and security policies. This briefing paper analyzes the report and agrees with the UNDP’s concern that in the current path towards achieving the Millennium Development Goals, the lack of distribution and social justice policies is leading to a “blind spot.” (Global Policy Forum and Friedrich Ebert Foundation)
In a new report the United Nations Conference on Trade and Developmentconcludes that poverty hinders economic growth by limiting the domestic resources available for private investment and public goods. International economic relationships could alleviate poverty but in practice they reinforce it.
This Economic Commission for Latin America and the Caribbean (ECLAC/CEPAL) report looks at the transformative social and economic effects of globalization in the ECLAC/CEPAL region. The report includes an excellent analysis of income inequality and “fundamental asymmetries of the global order,” and advocates a rights-based social agenda for the region.2008
Opulence and Chaos Meet in an African Boomtown (August 13, 2008)
Lagos, Africa’s fastest-growing mega-city has a population deeply divided along income lines. Wealthy Nigerians buy US$10,000 watches and ride in their BMWs and Bentleys. However, a vast majority of the people in Lagos are very poor. While, large oil companies rent out huge houses for their staff, 70 percent of the city’s population lives in slums with no electricity or water. Money from Nigeria’s oil industry does not trickle down to the poor and as the Director of a local economic rights group says, “Only the superrich can compete in this market.” (New York Times)An Era of Disparity (July 22, 2008)
Income inequality between the rich and the poor is accelerating. There are 500 billionaires worldwide, whereas 1.2 billion people live on less than a dollar a day. One-third of the 4.4 billion people who live in poor countries, do not have access to safe drinking water. The author says that the increasingly globalized economy unfairly allows a small percentage of the people to benefit. Instead, we should favor local workers and firms because a local economy would empower a greater majority of the world’s people. (Countercurrents.org)Global Slowdown: The LCDs’ Sword of Damocles (July 17, 2008)
This World Economy and Development in Brief article states that increased exports and foreign investment have led to strong economic growth in some poorer countries. But, the growth has only benefited a small section of these countries’ populations. The 2008 UNCTAD Least Developed Countries Report says that countries should increase public spending through well-targeted programs in areas of primary education and create jobs for their growing populations.GDP: The Measure and Mismeasure of the Economy (June 30, 2008)
This Canadian Broadcasting Corporation article criticizes world leaders and economists who use Gross Domestic Product (GDP) as an indicator of quality of life. GDP measures overall output and strength of a country’s economy. But, the author says “GDP is a measure of quantity, not quality,” as it fails to reflect the income gaps between the rich and the poor. He proposes alternate measures like the UN Human Development Index and the Genuine Progress Indicator that use health, environmental impact and standard of living as indicators of the quality of life.Spreading the Benefits of Globalization (March 26, 2008)
Increasingly, the public, economists and development analysts are questioning whether globalization has delivered on its “promised benefits.” Various reports show a trend of increased inequality in the world, between the North and the South, but also within both poor and rich nations. The author concludes that a tiny group at the top of global society reaps the rewards of globalization, while the vast majority of people miss out. He supports drastic re-distribution from the top down, such as increasing income tax for top earners, and eliminating income tax for those earning less than a given average national income. (World Economy & Development in Brief)Measuring Wealth by the Foot (March 16, 2008)
Many fear for a global recession, but the world’s billionaires are not worried. This New York Times article reports that billionaires are continuing a game of “one-upmanship” around who has the longest, most sophisticated yacht.
Globalization 'Localizes' Inequality (March 11, 2008)
Global income inequality between rich and poor countries is decreasing says Inter Press Service. The UN Conference on Trade and Development (UNCTAD) reports that real per capita incomes are on average 18 times higher in richer nations than poorer nations, compared to 24 times higher in 1980. But, this data fails to explain why poverty and hunger are increasing worldwide. In fact, economic inequality within richer and poorer nations has also increased markedly, leading to violent protests in India and large-scale demonstrations in China.Globalization and War (March 10, 2008)
Political scientist Susan George argues that “corporate-led, finance-driven globalization” has led to huge and ever increasing inequality. Globalization has been good to those in the tops of societies, but the system as a whole faces crisis: The World Trade Organization finds itself in deadlock, and institutions such as the World Bank are less important than before. George argues that scarcity of food and water, climate change, and the risk of an economic recession will place further, extreme stress on the world system and will lead to increased violent conflict. (Transnational Institute)2007
Oil Price Rise Causes Global Shift in Wealth (November 10, 2007)
The continuing rise of global oil prices is causing a shift in wealth in favor of oil-producing countries. For some of these countries, such as Iran and Venezuela, the new wealth brings a higher degree of economic independence, which may strengthen their position on the international political arena. Many economists, however, note that oil-producing countries fail to diversify their economies and that wealth remains concentrated among a few. (Washington Post)The Newest Billionaires: China’s Economy Churns out Dozens (November 6, 2007)
Second to the US, China has the largest number of billionaires in the world. Depending on where they choose to invest their fortunes Chinese billionaires could influence global political and economic relations. Commentators suggest that the growth of individual fortunes in China may also alter the country’s “cultural landscape.” China has a per capita income of less than US$1,000 a year and the inequalities in wealth and income could destabilize Chinese social relations. (International Herald Tribune)Are the Poor Getting Poorer? (October 31, 2007)
This article on poverty and inequality from WorldNet Daily is an example of how statistics can be misused to prove a case. The author uses statistics on the frequency of color TV and microwave ownership to prove that poverty does not exist in the US. The author also argues that ultimately poverty is self-inflicted and that people could escape their “perceived poverty” if they were willing to work and get married. The author’s interpretation of household consumption data fails to take into consideration relative prices of consumer goods, which in any case are inadequate indicators of wealth in a country where luxury goods are more affordable than necessities such as basic health care.Investment, Inequality Growing Globally (October 21, 2007)
Three reports by the United Nations Conference on Trade and Development (UNCTAD), the World Bank and the International Monetary Fund (IMF) analyze growing global inequalities of wealth and income. Although foreign direct investment is surging worldwide, most investment still takes place in rich countries. The IMF says that trade liberalization has increased income inequalities while the World Bank suggests that countries must promote agricultural and rural development to level out global earnings. (Jamaica Glearer)American Sickness: Diagnosis and Cure (October 16, 2007)
This article focuses on the huge inequalities in the United States. The economic differences are particularly well reflected in statistics on US citizens’ health. In the Harlem district of New York, life expectancy of male infants matches that of Belize and Tanzania and the average life expectancy is lower than in Bangladesh. Poverty and job insecurity leave a great number of US citizens without any or sufficient insurance and access to health care in general is often limited. The authors point to success in other industrialized nations and call for higher spending on education and increased levels of taxation to create a more equal society. (openDemocracy)Scarcity Amid Abundance (October 16, 2007)
This Inter Press Service article investigates the links between economic growth and inequality in Latin America. While Latin American countries are among the world’s largest food producers, poverty and hunger are huge problems in the continent. The article looks in detail at the various projects and policies that have been implemented by governments in Brazil, Venezuela, Argentina and Uruguay to reduce hunger and concludes that they have been relatively successful.Inequality in India and China: Is Globalization to Blame? (October 15, 2007)
The Asian continent has experienced increasing economic inequality over the last two decades. Critics suggest increased exposure to international market is to blame. On the other hand, the author of this YaleGlobal article argues that the expansion of industrialization in countries such as China and India has created many jobs and lifted a lot of people out of poverty. But, in both countries poverty declined prior to economic liberalization. The author argues that the Indian and Chinese case studies alone cannot establish the effects of globalization on income distribution.Stemming the Trickle-Up Effect: Finding Alternative Economies (October 11, 2007)
Income and wealth inequality is growing in the US. The richest one percent now earn as much as the bottom 33 percent of the population. Concerned citizens are establishing “solidarity economy networks” to promote social justice. These networks follow in the wake of many alternative wealth-creation institutions that workers and citizens have set up to create more equal employment and wage arrangements. Economic experts gathering in Washington in October 2007 agree that setting up communities such as the solidarity networks and employee stock ownership plans could be a good approach to reduce the inequalities in the US economy. (Inter Press Service)Trickle-Up Economics: New Report Reveals Staggering Global Wealth Concentration (October 8, 2007)
From 2001 to 2006, world wealth increased significantly, with a 7.5 percent increase in 2006 alone. Over the same period, the households who hold less than US$100,000 in assets saw a decline in wealth. The Boston Consulting Group estimates that 0.7 percent of the world’s households now hold a third of the world's financial assets. A report from the same group draws attention to the money made from handling these valuable assets – 111 wealth managing firms who were surveyed have an astonishing average profit margin of 34.7 percent. (Too Much: A Commentary on Excess and Inequality)Behind London's Boom, Billionaires from Abroad (October 5, 2007)
London is now rivaling New York as the world’s financial capital. Business is soaring and the city is experiencing an influx of foreign billionaires spending their money in the city. The foreigners are attracted by London’s strategic business location and by very favorable tax arrangements. London officials are seeking to attract rich business people bringing money to town, and London mayor Ken Livingstone has established offices in China and India to attract high-end investments. However, the expansion of wealth in London is driving up prices making it difficult for ordinary inhabitants to continue living in an increasingly elite city. (Wall Street Journal)Massive Inequality is Unexamined Fault Line Behind GM Walk-Out (October 2, 2007)
In the first half of the twentieth century, US labor unions struggled successfully to improve wages and working conditions. The unions had support from high level politicians, among them President Franklin D. Roosevelt, who proposed the idea of a maximum wage to counter income inequality. Even though the Congress never adopted the maximum wage, high wages were held down by high taxes. Since then, US administrations have lowered tax rates and the strength and influence of labor movements has been diminished. Organized General Motors auto workers are now trying to reverse the trend, as was demonstrated in their factory walkout in October 2007. (AlterNet)For the Yachting Class, the Latest Amenity Can Take Flight (October 2, 2007)
The very rich have long been spending their money on fancy cars and big yachts. While a yacht is still a desired luxury product for those with high incomes, a yacht with a private helicopter and submarine is now the “real deal.” Reports from the Monaco boating fair indicate no reduction in luxury purchases despite higher oil prices, a falling dollar and warnings of global warming. Rather the very rich tend to buy bigger and more expensive yachts, and to equip them with ever more advanced accessories. The report serves as a reminder of the extreme differences in a world of increasing inequality in income and wealth. (New York Times)Globalization: End of the Beginning — or Beginning of the End? (September 11, 2007)
This Globalist article compares the US and Chinese economies following decades of economic globalization. The two countries are experiencing equally worrisome levels of income inequality and turbulence in their financial markets. This has caused fear, even among pro-globalization advocates. The author suggests that the global economy is headed towards a rough patch. He does not necessarily advocate for an end to globalization but rather a reform of the nature of globalization as we know it. He predicts that the structure of the global economy will have to change to counter the wide global and national disparities.Managing Globalization: To Reduce Poverty, Money Isn't Everything (August 21, 2007)
This International Herald Tribune article argues that the standard of living in Venezuela and Brazil has risen in recent years. In Venezuela, President Hugo Chavez has implemented land reform and redistributed Venezuela's oil wealth to reduce inequality. But some have criticized Chavez, because his programs have prioritized the poor who are loyal to the regime. In Brazil on the other hand, progress appears to have been more "widespread" than in Venezuela and easier to measure.All Fall Down (July 30, 2007)
Ten years after the devastating Asian financial crisis, economies in the region are growing, but there is also greater poverty and inequality. Seeking to protect their economies, the Association of South East Asian Nations (ASEAN) have come together with China, South Korea, and Japan to form the “ASEAN Plus Three” financial group. This agreement will enable member countries to “swap reserves if speculators again target their currencies.” But former US Treasury Secretary Robert Rubin argues that is it almost inevitable that there will be severe financial crises in the future around the world. (Foreign Policy in Focus)Experts: As Economy Grows, Income Disparity in Latin America Widens (July 30, 2007)
Despite some solid economic growth in various Latin American countries, the region has the greatest income inequality in the world. Latin America’s economy has “grown between 4 to 6 percent annually since 2004,” but “200 million people still live in poverty and 81 million of them in extreme poverty.” Rodrigo Guerra, head of the Social Observatory of the Latin American Bishops' Council, said that the inequality is quickly increasing in all Latin American countries. The article calls for governments to invest in social programs, to reform the education and the judiciary in order to reduce such disparity. (Catholic News Service)In China, an Unsettling Gap Grows (July 15, 2007)
According to a recent study by the Chinese Academy of Social Sciences, the wealthiest 10 percent of Chinese control 40 percent of all assets while the poorest 10 percent possess just 2 percent of these assets. This article discusses how a growing inequality gap in China is upsetting Chinese socialist leaders who fear that inequality could lead to instability instead of “a harmonious society.” Today, the central contradiction in China's economic rise lies between the urge to consume and the struggle for social equality. (Chicago Tribune)Inequality Rising Despite Promises of Globalization, UN Expert Says (February 9, 2007)
Although proponents of globalization predicted it would result in a “more equitable world with equal opportunities,” global inequality both between and within countries has instead increased. A United Nations senior economist has stated that “full, productive and decent employment”—not economic liberalization—is the only way to effectively reduce poverty and narrow these global income gaps. (UN News)Rich Growing Richer Faster than Poor in Developing Asia (2007)
This Asia Development Bank (ADB) study argues that there is a growing gap between rich and poor in Asia as rich people are growing richer far faster than poor people are improving their lot. The report shows that out of the 22 countries analyzed, China and Nepal experienced the widest wealth gaps. The report argues that urban areas have grown richer than rural areas, and “highly educated households” assembled more wealth than “less educated ones.”2006
Press Release: Growth Prospects Are Strong, but Social, Environmental Pressures from Globalization Need More Attention (December 13, 2006)
Under the “central scenario” of the World Bank’s Global Economic Prospects 2007 world GDP will roughly double over the 2005-2030 period with developing country exports accounting for a significant share of the increase. While this growth could halve the number of people living on less than a dollar a day by 2030, the report also acknowledges that growing income inequalities and global warming could “jeopardize long-term progress.” Along with reducing barriers to trade, the report calls for stronger international institutions to tackle the stresses on the ‘global commons.’ At the national level the Bank calls for government investments in education and infrastructure “to ensure that the poor are incorporated into the growth process.”Globalization and Growing Disparities (July 7, 2006)
For two decades, “protagonists” of the Washington Consensus have promised that neoliberal policies would soon make everyone better off. Yet, these policies have failed to reduce hunger, malnutrition and poor health conditions. Inequality keeps rising. Looking at India, the author warns that large inequalities could lead to social unrest that could undermine the very conditions for economic growth in the country. Some Latin American countries, on the other hand, “have begun prospering only after discarding the Washington consensus.” (ZNet)Reducing International Inequality- UN Report (July 2006)
UN Under Secretary General for Economic and Social Affairs Jose Antonio Ocampo comments on the UN’s World Economic and Social Survey 2006 . Ocampo links rising international inequalities to volatility in the global markets, weak domestic economies and insufficient infrastructural development. The Survey pinpoints the processes that exacerbate these disparities and suggests a four-tiered agenda to reverse international economic divergence. (South Centre)Unbridled Capitalism Will Lead to Very Real Problems (April 17, 2006)
In this interview, Harvard economist Kenneth Rogoff warns that the unfair distribution of wealth within most countries will lead to serious social tensions all over the world. As big company profits reach record highs, an ever-smaller percentage of the population gains from high economic growth rates, while most workers see their wages stagnate. As a result, governments could lose public support for policies promoting deregulation of market activities. (Spiegel)Globalization Will Increase Inequality in Developing Countries (February 28, 2006)
This article identifies causes and solutions to the high and rising inequality across the world. In many poor countries, the lack of access to higher education hinders people from participating in the globalized economy. In addition, the market itself produces failures, such as financial crises, that increase intra-country inequality. Only serious political commitment of governments and fair multilateral economic and social cooperation among rich and poor countries can stop the rise of worldwide inequality. (South Centre)World Economy Giving Less to Poorest in Spite of Global Poverty Campaign Says New Research (January 23, 2006)
According to a publication of the New Economics Foundation, the world’s poorest benefit very little from economic growth. Moreover, “our obsession with growth” fails to provide long-term, environmentally sustainable solutions to people’s well being. While economic growth can contribute to better living conditions, the report encourages alternative approaches to global economic challenges.Growing dissent (January 23, 2006)
Many economists see growth as the ultimate answer to all problems, including poverty. Nevertheless, the poor’s share in its benefits has decreased constantly in recent decades and the environmental costs of growth have steadily grown. This article calls for a new global economic system with a global income distribution arrangement to assure poverty reduction and environmental sustainability. (Guardian)2005
Unequal Gains (December 22, 2005)
Global inequality has sharply risen during the last decades. The average income of the richest 20% of the world’s population in 1960 was 30 times higher than that of the poorest 20%. In 1995, this number had increased to 82 times. This article takes on the common arguments of neoliberal policymakers, who deny this phenomenon. (Telegraph)Review of the First United Nations Decade for the Eradication of Poverty: 1997-2006 (December 12, 2005)
This report by the UN Secretary General looks at the last ten years of worldwide efforts to reduce poverty. Although poverty has decreased in Asia, the UN observed little progress in Latin America and especially Africa. These regions suffer from wide income inequalitiy preventing economic growth from translating into reduced poverty. (United Nations)All Types of Inequality Are Not Created Equal: Divergent Impacts of Inequality on Economic Growth (December 2005)
This report examines the complexities of defining inequality within and between countries. Using ethnic and gender disparities as case examples, the author argues that inequality can lead to short and medium term economic growth and development, but may come at a long run detriment to the marginalized group. The author calls on countries and development agencies to take into account the diversity of economic needs among different sectors of society and to make “growth and equity compatible.” (Levy Economics Institute of Bard College)MDGs Mask Injustice and Inequality in Latin America (November 2005)
By focusing on the Millennium Development Goals (MDGs), countries risk distracting from problems of injustice and inequality. This is particularly relevant for Latin America, the most socially unequal region in the world. Rather than endorsing neoliberal economic policies, governments must seek to achieve the MDGs “in a way that tackles injustice and inequality.” (id21)Reducing Poverty by Tackling Social Exclusion (September 2005)
Very often, poverty and social exclusion coexist. People who are discriminated against on the basis of their race, religion or gender can not claim their political and economic rights. As in Indonesia, Sudan or Kosovo, conflict and insecurity grow and governments’ development policies fail to reach the socially excluded people with almost no opportunities to build a better life. This paper from the UK Department for International Development deals with social exclusion and the ways in which governments and NGOs can eliminate it.The Root Cause of Poverty in Latin America (September 13, 2005)
Political leaders rarely discuss redistribution in their speeches on development. They should. The experience of several Latin American countries shows that social policies of redistribution, rather than privatization and liberalization, strongly contribute to reduce inequality and promote development. (Inter Press Service)Globalization Driving Inequality, UN Warns (August 26, 2005)
What is economic development? Does economic development bring about a society where everyone has the right to a decent life or does it only give wealth to a small percentage of the population? A recent UN report on "The World Social Situation: The Inequality Predicament" focuses on the “persistent and deepening inequality” in the world. This condition makes it more difficult for poor countries to achieve the Millennium Development Goals. (Inter Press Service)Bad to the Last Drop (August 1, 2005)
While over 1 billion people worldwide lack reliable access to safe drinking water, people in rich countries spend astronomical amounts of money on bottled water, which they could not distinguish from tap water if they tried. Ironically, only $11 billion would pay for clean water and sanitation for everybody on the planet, a figure which represents less than a quarter of global annual spending on bottled water. (New York Times)Archived Articles
