"Income Inequality Is Not Rising Globally. It's Falling."

[applegrove]

Income Inequality Is Not Rising Globally. It's Falling.

By TYLER COWEN at the NY Times

http://www.nytimes.com/2014/07/20/upshot/income-inequality-is-not-rising-globally-its-falling-.html?_r=0

"SNIP..........................




Income inequality has surged as a political and economic issue, but the numbers don’t show that inequality is rising from a global perspective. Yes, the problem has become more acute within most individual nations, yet income inequality for the world as a whole has been falling for most of the last 20 years. It’s a fact that hasn’t been noted often enough.

The finding comes from a recent investigation by Christoph Lakner, a consultant at the World Bank, and Branko Milanovic, senior scholar at the Luxembourg Income Study Center. And while such a framing may sound startling at first, it should be intuitive upon reflection. The economic surges of China, India and some other nations have been among the most egalitarian developments in history.


Of course, no one should use this observation as an excuse to stop helping the less fortunate. But it can help us see that higher income inequality is not always the most relevant problem, even for strict egalitarians. Policies on immigration and free trade, for example, sometimes increase inequality within a nation, yet can make the world a better place and often decrease inequality on the planet as a whole.

International trade has drastically reduced poverty within developing nations, as evidenced by the export-led growth of China and other countries. Yet contrary to what many economists had promised, there is now good evidence that the rise of Chinese exports has held down the wages of some parts of the American middle class. This was demonstrated in a recent paper by the economists David H. Autor of the Massachusetts Institute of Technology, David Dorn of the Center for Monetary and Financial Studies in Madrid, and Gordon H. Hanson of the University of California, San Diego.


.........................SNIP"

[applegrove]

1. There is no reason why wealth cannot be better distributed within US economy. Canada does it.

Germany does it. The US is by far the worst of the OECD countries when it comes to inequality. Right up there with Russia and Mexico.

[closeupready]

5. And this op-ed is an attempt to help steer public discussion AWAY from that point.

He is arguing that if our families go hungry at night while the Walton family holds $80 Billion offshore, the big picture is, it's working out very well for the Waltons and peasants in China.

[JaneyVee]

2. All this means is...

Citizens of developing countries are going from dirt poor to poor.

[applegrove]

3. Which is a huge and meaningfull change. Must more of a change than someone in the West

going from working class to rich.

[Erich Bloodaxe BSN]

7. Except that people in the West, or at least the US

aren't going from working class to rich, they're going from working class to poor.

[applegrove]

8. Agreed. Instead of fighting world trade we should be fighting the right wing's

new rule against any tax increases whatsoever. And not just for Americans. For people all over the world to be able to expect that those that do great business in their countries pay their fair share for all the highways their trucks destroy, all the rule of contract and property law that they use, educated population they need, middle class that is fostered to buy their products, etc.

[closeupready]

11. We can fight unfair trade practices and agreements that harm US interests, AND

chew gum at the same time.

[Erich Bloodaxe BSN]

6. And citizens in places like the US are going from moderately wealthy to moderately poor.

It's like that study that showed that raising taxes X amount on everyone reduces inequality if you then redistribute it to the poor.

The obscenely wealthy stay obscenely wealthy, but the poor move up a little and the middle class move down a little, so overall, inequality decreases.

[closeupready]

4. What a bunch of horse shit.

[Trillo]

9. Global income calculator

http://www.globalrichlist.com/

It had been posted years ago on DU, seems like a good thread to repost it.

[closeupready]

10. The dishonesty here is, income inequality in the US is the problem.

What's happening globally is a matter almost entirely for governments which are not accountable to US citizens.

The issue as it's been discussed recently is about income inequality WITHIN the US. Period.

[TBF]

12. Apologist bullshit. nt

[Number23]

13. K&R This is apparently news to some here but it's not news

Don't know why this seems to anger some here and truly, I could give a shit. The MDGs have also played a role in this.

As someone who has worked in and been to several developing countries, I'm damn glad to see that some of the sickest, poorest people in the world are getting some of the help that they need. Income inequality won't be eradicated in my lifetime, but damn it's got to start somewhere.

[Ron Green]

14. When a poor country shifts from a relationship-based society

to a consumption-based one, that's not necessarily a good thing.

[pampango]

15. Good news to liberals that global inequality is falling. Bad news that domestic inequality is rising

The top 1% has seen its real income rise by more than 60% over those two decades. The largest increases however were registered around the median: 80% real increase at the median itself and some 70% around it. It is there, between the 50th and 60th percentile of the global income distribution that we find some 200 million Chinese, 90 million Indians, and about 30 million people each from Indonesia, Brazil and Egypt. These two groups—the global top 1% and the workers of the emerging market economies— are indeed the main winners of globalization...

But the biggest loser (other than the very poorest 5%), or at least the “non-winner,” of globalization were those between the 75th and 90th percentile of the global income distribution whose real income gains were essentially nil. These people, who may be called a global upper-middle class, include many from former Communist countries and Latin America, as well as those citizens of rich countries whose incomes stagnated.

More than fifty percent of one’s income depends on the average income of the country where a person lives or was born (the two things being, for 97% of world population, the same). This gives the importance of the location element today. There are of course other factors that matter for one’s income, from gender and parental education which are, from an individual point of view externally given circumstances, to factors like own education, effort and luck that are not. They all influence our income level. But the remarkable thing is that a very large chunk of our income will be determined by only one variable, citizenship, that we, generally, acquire at birth. It is almost the same as saying, that if I know nothing about any given individual in the world, I can, with a reasonably good confidence, predict her income just from the knowledge of her citizenship... Around 1870, class explained more than 2/3 of global inequality. And now? The proportions have exactly flipped: more than 2/3 of total inequality is due to location.

OECD study: Income gains to top 1% last 30 years - US worst (by far), Europe best (by far).

Canada is second only to the U.S. in its growing inequality. In the U.S., about 47 per cent of total growth went to the wealthiest one per cent between 1975 and 2007, compared to 37 per cent in Canada, while in Australia and the U.K., about 20 per cent of growth went to the wealthiest.

In Nordic countries and in France, Italy, Portugal and Spain, about 90 per cent of growth went to the 99 per cent of middle and low-income earners in the same period.

Larry Summers, who was secretary of the treasury under Bill Clinton and is now a Harvard professor, has pointed out how the constant push for tax cuts and the erosion of union bargaining rights has led to greater income inequality.

The study calls for higher marginal tax rates and fewer tax deductions and credits aimed at high income earners. It also advocates wealth or inheritance taxes.

http://www.cbc.ca/news/business/top-1-taking-lion-s-share-of-global-growth-oecd-says-1.2627154

Nordic countries support (and the rest of European countries for that matter) support trade with the global poor with tariff-free trade with the poorest countries. They both support global equality and domestic equality at the same time.

[L0oniX]

16. It is delusional to believe you can fight this.