Reprinted from The Washington Post by Esmé Deprez on September 21, 2018.
“The pope has deplored it,” writes Esme Deprez in The Washington Post. “It’s shifted Chinese economic goals and helped fuel populist political movements around the world. Even some of the world’s billionaires fear what might happen if it continues to rise. It is income inequality: a gap between rich and poor that has been widening in many countries for a generation. The term is often used imprecisely as a catch-all description of various related ills including poverty, job stagnation, class division and social disorder. Yet there’s much debate among economists about the impact of inequality itself and its relationship to prosperity.
“Unequal distribution of wealth increased in every region of the world from 2007 to 2016. For the US, the average income of the poorest fifth of all households rose 12.1 percent to $12,943, while income of the wealthiest 5 percent saw a 30.6 percent increase to $375,088. The CIA World Factbook ranks Lesotho and South Africa as least equal among 157 nations, based on the Gini index, which measures family income distribution within a population. China is No. 29, with its disparities driven in part by rapid urbanization: Rural residents who receive less schooling and reap lower returns from education earn just a third of their urban counterparts. The US is No. 39; Jersey, one of the Channel Islands, is the most equal, followed by the Faroe Islands north of Scotland, Kosovo and Slovakia. Researchers have linked rising inequality to greater political instability, sluggish wage growth, slow productivity gains, reduced investment and even to longer commutes and higher divorce rates. While it’s difficult to disentangle all the reasons populist politicians have won office in places such as the US, Mexico and Italy in recent years, their ability to tap into anxiety among people who see the economy as stacked against them has surely played some role. …