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Income Inequality

Weekly wire: The global forum

Roxanne Bauer's picture
World of NewsThese are some of the views and reports relevant to our readers that caught our attention this week.
 

Income inequality: poverty falling faster than ever but the 1% are racing ahead
The Guardian
How are the benefits of economic growth shared across society? Much of the current discussion assumes that income inequality is rising, painting a gloomy picture of the rich getting richer while the rest of the world lags further and further behind. But is it really all bad news?  The reality is complex, yet by looking at recent empirical data we can get a comprehensive picture of what is happening to the rich and the poor.  Let us start with the share of total income going to that much-maligned 1%. Reconstructed from income tax records, this measure gives us the advantage of more than a century of data from which to observe changes.

Global Journalism Education: A Missed Opportunity for Media Development?
Center for International Media Assistance
Media development organizations have worked for many years directly with media industries to train journalists. Little of their effort has been focused on shaping the training these journalists receive before they are immersed in the media industries, which in many countries are weak and are not fertile ground for building journalism skills nor for upholding journalism standards. But top journalism schools have now reached a quality that suggests media development organizations should begin to work more directly with the best schools. Such partnerships could substantially contribute to better professional training that many of these schools want to offer.
 

​Are we heading towards a jobless future?

Randeep Sudan's picture
From the wheel to the steam engine, from the car to ‘New Horizons’ — an inter-planetary space probe capable of transmitting high-resolution images of Pluto and its moons — from the abacus to exascale super-computers, we have come a long way in our tryst with technology. Innovations are driving rapid changes in technology today and we are living in a world of perpetual technological change.
 
Photo: Wikimedia Commons

In 1965, Gordon Moore — co-founder of Intel Corporation — hypothesized that the number of transistors on an integrated circuit will double every 18 to 24 months. This came to be known as Moore’s Law, the ramifications of which are hard to ignore in almost any aspect of our everyday lives. Information has become more accessible to people at lower costs. Today’s work force is globalized and there are few domains that are still untouched by technology.
 
Yet the very ubiquitous and rapidly evolving nature of information and communication technologies (ICTs) gives rise to fears of displacing more workers and potentially widening the economic gap between the rich and poor. Technological evolution and artificial intelligence are fast redefining the conventional structure of our society.

Unleashing the power of women entrepreneurs around the world: The smartest investment to unlock global growth

Jin-Yong Cai's picture
Jacqueline Mavinga, entrepreneur, Democratic Republic of Congo.  © John McNally/World Bank Group


​Since childhood, Gircilene Gilca de Castro dreamed of owning her own business, but struggled to get it off the ground. Her fledgling food service company in Brazil had only two employees and one client when she realized she needed deeper knowledge about what it takes to grow a business. To take her business to that next level, she found the right education and mentoring opportunities and accessed new business and management tools.

Campaign Art: How (un)equal is East Africa?

Roxanne Bauer's picture
People, Spaces, Deliberation bloggers present exceptional campaign art from all over the world. These examples are meant to inspire.

The 85 richest individuals in the world own as much as 3.5 billion of the poorest people, according to Oxfam. It's a staggering statistic, but it has friends. 

The 2014 Global Wealth Databook by Credit Suisse reports the bottom 50% of the world's population own less than 1% of its wealth, the richest 10% hold 87%, and the top 1% alone possess 48.2%. 

The International Monetary Fund and World Bank Group also stated in the Global Monitoring Report that while the number of people living in extreme poverty is decreasing, the gap between the haves and the have nots is increasing. Today, the world's richest 10% earn 9.5 times more than the poorest 10% of the world. Twenty-five years ago, they earned 7 times more than their less fortunate peers.

Taking a closer look at East Africa, Ben Taylor (mtega), an Open Development Consultant with Twaweza, finds that the richest 1% in East Africa own as much wealth as the poorest 91%. The six wealthiest individuals in the region own as much as 50% of the region’s population or 66 million people.
 
How (un)equal is East Africa?

FT Weekend: Glimpses of Unattainable Opulence

Sina Odugbemi's picture
Why do we consume the media that we do, especially the ones we rely on all the time? Many media scholars argue that we consume media because of their usefulness to us and the gratifications they bring. This is known as the uses-and-gratification paradigm. Says Alan M. Rubin:
 

The assumptions of uses and gratifications underscore the role of audience initiative and activity. Behavior is largely goal directed and purposive. People typically choose to participate and select media or messages from an array of communication alternatives in response to their expectations and desires. These expectations and desires emanate from, and are constrained by, personal traits, social context, and interaction. [i]

If this is true, and I believe it is, then the media you regularly consume says a lot about you, particularly your expectations and desires.

Inequality of opportunity and economic growth: A cross-country analysis

LTD Editors's picture

Income differences arise from many sources. While some kinds of inequality, caused by effort differences, might be associated with faster economic growth, other kinds, arising from unequal opportunities for investment, might be detrimental to economic progress.  A new World Bank study by Francisco H. G. Ferreira, Christoph Lakner, Maria Ana Lugo, and Berk Özler uses two new metadata sets, consisting of 118 household surveys and 134 Demographic and Health Surveys, to revisit the question of whether inequality is associated with economic growth and, in particular, to examine whether inequality of opportunity -- driven by circumstances at birth -- has a negative effect on subsequent growth. The results are suggestive but not robust: while overall income inequality is generally negatively associated with growth in the household survey sample, the study finds no evidence that this is due to the component associated with unequal opportunities.

Reviewing the Facts on Top Incomes and Inequality in Egypt

Paolo Verme's picture

One of the puzzling aspects about Egypt is that income inequality measured through household surveys before the revolution was very low compared to the perceptions of inequality and injustice voiced by the people of Egypt during the revolution. A recent book on Egypt has tried to explain this apparent mismatch and found several leads that could explain why both the data and the people of Egypt may be right. Household data in Egypt are of good quality and measure income inequality well relative to other comparable surveys worldwide and the people of Egypt had good reasons to complain about social injustice as real incomes declined, prices increased and jobs and opportunities were scarce before the revolution.

Chile’s School System Feeds Income Inequality

Sergio Urzúa's picture

In the 1980s, Chile's educational system underwent a major overhaul that included decentralizing administrative powers and the creation of a three-tiered school system. We spoke with Sergio Urzúa (University of Maryland) about a new study published by him, Dante Contreras (University of Chile), and Jorge Rodríguez (University of Chicago), which suggests that the three-tiered school system, along with other educational reforms, aren't helping to reduce income equality.

The Link Between Income Inequality and Public Services is Stronger than I Realized (Thanks to Emma Seery for Putting Me Straight)

Duncan Green's picture

Oxfam has been banging on to good effect recently about extreme global inequality in income and wealth. Over many years, we have also been making the case for universal health and education. It turns out the link between the two is stronger than I’d realized, according to ‘Working for the Many: Public Services fight Inequality’, a new paper published today.

We normally discuss inequality before and after tax (eg it’s progressive taxation that really brings Europe’s inequality down). But recent work published by the OECD and World Bank has put a monetary value on the ‘virtual income’ provided by public services. This produces some startling findings on inequality.

Public services mitigate the impact of skewed income distribution, and redistribute by putting ‘virtual income’ into everyone’s pockets. For the poorest, those on meagre salaries, though, this ‘virtual income’ can be as much as – or even more than – their actual income. On average, in OECD countries, public services are worth the equivalent of a huge 76 per cent of the post-tax income of the poorest group, and just 14 per cent of the richest. It is in the context of huge disparities of income that we see the true equalizing power of public services.

Redistribution and Growth: The MENA Perspective

Elena Ianchovichina's picture

Recently three IMF economists published a paper arguing that redistribution is in general pro-growth (Ostry et al. 2014). The paper caused a stir as it dismisses right-wing beliefs that redistribution hurts growth. However, even people sympathetic to the ideas of inclusive growth and equality of opportunity find this finding problematic. One reason is that the authors rely on a measure of redistribution that misrepresents the true cost of redistribution in an economy. Another has to do with the omission of factors that affect positively the income growth of the poor and vulnerable, such as employment.  This omission would exaggerate the importance of equality through redistribution as a source of growth and underplay the importance of structural transformation and investments directed towards sectors that use unskilled labor more intensively, and therefore have the potential to generate inclusive growth and productive employment for the poor segments of the population.


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