By Neeraj Nanda
MELBOURNE, 10 December 2021: The collapse of the Soviet Union in 1991, which ushered in 30 years of globalisation and the the recent Covid pandemic have increased global inequalities increasing the gap between the rich and poor to unprecedented levels.Global inequalities remain extremely pronounced: they are about as great today as they were at the peak of Western imperialism in the early 20th century, says the The World Inequality Report 2022.
The report is brought out by the World Inequality Database with research by more than one hundred researchers from around the world and coordinated by Lucas Chancel (lead author), Thomas Piketty, Emmanuel Saez and Gabriel Zucman, co-directors of the World Inequality Lab, includes a foreword by 2019 economic Nobel prize laureates Abhijit Banerjee & Esther Duflo.
The report shows, “… the top 1 % took 38% of all additional wealth accumulated since the mid-1990s, with an acceleration since 2020. More generally speaking, wealth inequality remains at extreme levels in all regions (see figure 1.1)
“The COVID crisis has exacerbated inequalities between the very wealthy and the rest of the population. Yet, in rich countries, government intervention prevented a massive rise in poverty, this was not the case in poor countries. This shows the importance of social states in the fight against poverty.”, explains Lucas Chancel, lead author of the report.
Gabriel Zucman states: “The World Inequality Reports addresses a critical democratic need: rigorously documenting what is happening to inequality in all its dimensions. It is an invaluable resource for students, journalists, policymakers, and civil society all over the world.”
Lucas Chancel adds “If there is one lesson to be learnt from the global investigation carried out in this report, it is that inequality is always political choice.”
The key messages of the report are:
– MENA (Middle East/North Africa) is the most unequal region in the world, Europe has the lowest inequality levels.
– Nations have become richer, but governments have become poor, when we take a look at the gap between the net wealth of governments
and net wealth of the private and public sectors.
– Wealth inequalities have increased at the very top of the distribution. The rise in private wealth has also been unequal within countries and at the world level. Global multimillionaires have captured a disproportionate share of global wealth growth over the past several decades: the top 1% took 38% of all additional wealth accumulated since the mid-1990s, whereas the bottom 50% captured just 2% of it.
– Gender inequalities remain considerable at the global level, and progress within countries is too slow
– Ecological inequality: our data shows that these inequalities are not just a rich vs. poor country issue, but rather a high emitters vs low emitters issue within all countries.
Lucas Chancel explains: “Global economic inequality fuels the ecological crisis and makes it much harder to address it. It’s hard to see how we can accelerate efforts to tackle climate change without more redistribution of income and wealth”
The report combines data from national accounts, survey data, fiscal data, and wealth rankings. Limitations are admitted and in ‘Methodology’ it is said, ” None of these data sources and associated methodology is sufficient in itself. In particular, we stress that our ability to measure the distribution of wealth is limited, and that the different data sources at our disposal are not always fully consistent with one another. But we believe that by combining these data sources in the most explicit manner we can contribute to a better informed public debate. The research papers upon which our series are based are available on-line and present our methods and assumptions in the most transparent manner. All raw data sources and computer codes are released so that our work can be extended and improved by others.”
