Income inequality is one of the key challenges of our time and intersects with other complex social issues, for instance inequality of opportunity, extending to gender, ethnicity, disability and age.
In developed and developing countries alike, the poorest half of the population often controls less than 10% of its wealth. This is a universal challenge that the whole world must address.
Although it cannot be denied that the world economic growth is picking up pace, we must not ignore the challenges that still remain, such as poverty, persistent unemployment, political instability, environmental degradation, violence and conflict. If we choose to ignore these factors of inequality we will face greater problems. In developed and developing countries alike, the poorest half of the population often controls less than 10% of its wealth. This is a universal challenge that the whole world must address.
The 2015 Credit Suisse Global Wealth Report released the shocking news that the top one percent of households ‘account for half of all assets in the world’. Researchers have shown that worldwide wealth inequality is now at a level ‘possible not seen for almost a century.’ The number of ‘ultra-wealthy’ people continues to climb, whereas we are seeing a declining middle class and living in a world where the poorest half of the world’s populatioin ows just 1% of its assets. It’s disgusting.
Credit Suisse’s analysis is in line with a warning from the international humanitarian group Oxfam, issued earlier this year. The warning reported that the richest one percent of people on the planet would own at least half of the world’s wealth by 2016.
“The Credit Suisse report shows that inequality is growing faster than we had thought,” said Claire Godfrey, global inequality policy lead for Oxfam. “The fact that it has happened this year underlines the urgency of the problem.” Godfrey also suggests that the ‘trickle up’ economic model is great for the super rich, as they just get richer, but, unsurprisingly at the expense of the rest. This is not only bad news for global economic, but also bad news for democracy. She notes that “political leaders must take action now to raise the incomes of the poor and maintain the incomes of the middle class.”
The implications of rising extreme wealth inequality are greatly worrying and far-reaching. The highly unbalanced concentration of economic resources in the hands of fewer and fewer people impacts social stability within countries and threatens security on a global scale. It makes poverty reduction harder, threatens political inclusion, and compounds other inequalities.
Take Japan for example; the common saying “ichioku-sohchu-ryu” which translates to “a nation of middle-class people” resonates within the country, however, in the past few decades the middle-classhas shrunk twice the average rate of other OECD countries. Since 1980, incomes have dropped for the lower classes, while they’ve risen for the higher classes. It is important to note that since the middle-class started disappearing, there’s been a reported increase in depression, domestic violence and suicide, indicating the toll the economy has taken on the people.
The United Kingdom is no better, with the bottom 10% of the population not seeing a rise in income at all in the last decade.