Inequality is not inevitable, it is a political choice

Regional composition for the top 10%, middle 40% and bottom 50% wealth groups, 2021 (World Inequality Report 2022)

The World Inequality Report 2022 presents the most up-to-date synthesis of international research efforts to track global inequalities. The data and analysis presented are based on the work of more than 100 researchers over four years, located on all continents, contributing to the World Inequality Database (WID.world), maintained by the World Inequality Lab.

The richest 10% of the global population currently takes 52% of global income, whereas the poorest half of the population earns 8.5% of it. Global wealth inequalities are even more pronounced than income inequalities. The poorest half of the global population barely owns any wealth at all, possessing just 2% of the total. In contrast, the richest 10% of the global population own 76% of all wealth.

Contemporary global inequalities are close to early 20th century levels, at the peak of Western imperialism. Wealth inequalities have increased at the very top of the distribution.

Gender inequalities remain considerable at the global level, and progress within countries is too slow. Global income and wealth inequalities are also tightly connected to ecological inequalities and to inequalities in contributions to climate change. The top 10% of emitters are responsible for close to 50% of all emissions, while the bottom 50% produce 12% of the total.

Middle East and North Africa (MENA) is the most unequal region in the world, Europe has the lowest inequality levels.

Average national incomes tell us little about inequality. Averages mask wide disparities both between and within countries.

Furthermore, taxes do little to reduce inequality. Inequality differences after taxes and transfers (redistribution) are mainly driven by inequality differences before taxes and transfers (pre-distribution, due to the set of policies and institutions that reduce pre-tax income inequality). Pretax inequality explains most of the variations in post-tax inequality levels observed across countries. In other words, redistribution matters to reduce inequality but does not significantly change country rankings.

Inequality is not inevitable, it is a political choice.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.