The launch of the World Inequality Report 2018
Last month, World Inequality Lab published World Inequality Report 2018 — a ground-breaking and transparent approach to measuring income and wealth inequality.
The report graphically illustrates the rapid rise in income inequality across the world in the last four decades. Through analysing the available data from 1980 onward, the report shows that while income inequality has increased worldwide, the speed with which that has happened has varied. Why is that so?
National policies and institutions play a significant role in shaping inequality. This has important implications for our choices in the future.
The average income of the bottom 50% of the world population today is €3,100. If all countries follow the inequality trend observed in the US over the past 35 years, average income for this group will only rise to €4,500 by 2050. However, if all countries follow the much less unequal European trend from the same period, the incomes of the bottom 50% will increase to €9,100. This is extraordinary.
Global poverty can be virtually eliminated by following the moderate inequality trajectory that Europe has experienced in the past decades — rather than the more extreme patterns of inequality seen elsewhere. In this way, it will only take a single generation for global economic growth — if shared more equally with the vulnerable — to create an entirely different, and better, world.
How to tackle global inequality?
Achieving impact in reducing global income and wealth inequality requires significant shifts in national and global policies. Progressive taxation and stopping tax evasion are fundamental parts of the solution. Ensuring equal access to education and well paid jobs, as well as public investments into healthcare will help minimise further increases in inequality levels worldwide.
This report is a timely reminder that the work we and others have before us — supporting low- and middle-income countries achieve growth and reduce poverty and disadvantage through public policy reform, working in partnership with national decision makers to research, design, implement, and evaluate impactful public policy — is as relevant today as it ever was.