Living in the west, income inequality has become a hot topic over the past few years. This was made abundantly clear by the way so many people resonated with Occupy Wall Street protests. More and more power is being concentrated in the hands of the wealthiest.
But what about globally? How much money do you need to make in a year to be in the very top 1% of earners globally? Here’s what I found out:
It turns out this number isn’t easy to compute, because the cost of something like an ox cart in the US might be quite different than in Viet Nam. It’s also hard to figure out because economists don’t agree with how to compute it. I pulled this number out of a post on the Motley Fool, which referred to a book by an economist named Branko Milanovic, who published the fact in a book in 2011. But it’s a good bet that the real number is close to this.
This guy Branko has a new study out these days which should make you think.
This chart is extracted from the paper, and which shows what Branko and Paul Krugman call the “Twin Peak” world we are living in. It shows global income growth over the 20 years from 1988 to 2008 – basically from the fall of the Berlin Wall to the Great Recession.
The middle income earners in the world have seen the most growth. This is mostly due to the emerging middle class in countries like China and India. And of course the 1% has grown. But there is a huge gap in the middle, the 10 – 20%, which represents working class earners in developed countries like US and Europe.
Krugman observes that this mirrors the situation in the 1930s. Poor income growth after the Great Depression caused discontent and built support for racism and fascism.
I’m no economist, but this should make all of us extremely nervous. If true, it means economic justice is a security issue for the planet. If true, it means that anyone in that global 1% should be thinking clearly about ways that they can address poverty, health and literacy issues for the rest of the 99% of the world. It means that the poor are not just God’s concern, it ought to be ours as well.
I’m not thinking we need whole-scale wealth redistribution, how about just a little humanity?
By the way, my reading on this uncovered the Global Rich List, which should make you feel better about where you fit in with the world’s income levels. Check it out.