Inequalities have increased sharply in the world since the 1980s, especially in the United States, according to a report led by several renowned economists
Inequalities have widened sharply in the world since the 1980s, especially in the United States, according to a report led by several renowned economists, who are worried about a possible aggravation of the phenomenon by 2050.
Europe, Africa, Asia or the American continent: „Inequality has increased in almost all regions of the world,“ says this „report on global inequality“ released Thursday and compares unprecedented distribution of wealth globally and its evolution for almost four decades.
This phenomenon, however, has developed „at different rates“ depending on the region, say the researchers, who report a sharp rise in inequality in the United States but also in China and Russia, countries whose economies have strongly liberalized during the 1990s.
French economist Thomas Piketty, April 6, 2017 in Paris
According to the report led by Lucas Chancel, of the Paris School of Economics, and Thomas Piketty, author of the best-selling book Capital in the 21st Century, the share of national income going to the top 10% of taxpayers went from 21% to 46% in Russia and 27% to 41% in China between 1980 and 2016.
In the United States and Canada, this rate rose from 34% to 47%, while Europe experienced a „more moderate“ increase (from 33% to 37%). „In the Middle East, sub-Saharan Africa and Brazil, inequality has remained relatively stable“, but „at very high levels,“ the report says.
– „extreme divergence“ –
In 2016, the podium of the most unequal regions and countries was formed by Brazil (55% of the national income held by the richest 1%), India (55%) and the Middle East (61%), which draws according to the authors a „horizon of inequalities“ on a world scale.
In this region, the inequalities are „undoubtedly underestimated“, further emphasizes the report, which evokes a contradiction between the official statistics of the Gulf countries and „certain aspects of their economic policy“, such as „the increasing use of low-paid foreign workers „.
In terms of evolution, the divergence is also „extreme between Western Europe and the United States, which had comparable levels of inequality in 1980, but are today in radically different situations“ The document, made with the help of a hundred researchers from 70 countries, underlines the document.
In 1980, the share of national income going to the 50% of the poorest taxpayers was almost identical in both regions: 24% in Western Europe and 21% in the United States. Since then, this rate has stabilized at 22% on the European side, while it has fallen to 13% across the Atlantic.
A phenomenon that explains, according to Thomas Piketty, the „collapse of the lowest incomes“ in the United States, but also by „a considerable inequality in education“ and „a less progressive taxation“ in this country. „This shows that public policies have a strong impact on inequalities,“ he adds.
– „room for maneuver“ –
The main victim of this dynamic according to the report, which is based on 175 million fiscal and statistical data from the wid.world project (wealth and income database): the „global middle class“.
Between 1980 and 2016, the richest 1% captured 27% of global growth. The poorest 50% have only captured 12% of the wealth created, but have seen their income increase significantly. This was not the case for individuals between these two categories, whose „income growth was weak“.
Will these inequalities strengthen or fade in the future? In their report, the authors anticipate a new rise by 2050, based on current trends. The share of wealth of the richest would thus pass from 33% to 39%, while „the world middle class“ would see its share of heritage „compressed“, from 29% to 27%.
„Such an evolution is not inevitable, however,“ the authors say. According to their projections, inequality will worsen further if all countries follow the current trend in the United States, but will decline slightly if they follow the trajectory of the European Union.
„There is room for maneuver, everything will depend on the choices that will be made,“ concludes Thomas Piketty, who deems necessary a „public debate“ on these issues.