Data, Info and News of Life and Economy

Tag Archives: Wealth Inequality

Chart: The Percentage of Wealth Owned by the Top 1% in the U.S. Keeps Rising

Most recent data from the Fed is for Q3 2021

Source : Mish Talk

China’s Wealth Inequality Has Worsened in Pandemic, Highlighting ‘Alarming’ Global Trend

Frank Tang wrote . . . . . . . . .

The world’s income and wealth inequality is said to have reached an “alarming” level two years into a global pandemic that has killed at least 5.5 million people.

The disparity has proved particularly challenging for Asian countries, forcing Beijing, Tokyo, Bangkok and others to provide more policy support, according to analysts.

The wealth of the world’s 10 richest men has doubled to about US$1.5 trillion since the coronavirus pandemic began, but the incomes of 99 per cent of humanity are worse off, Oxfam said in its “Inequality Kills” report on Monday.

“This is the biggest surge in billionaire wealth since records began. The trend is alarming,” warned the organisation that is dedicated to alleviating global poverty. It also called for permanent wealth and capital taxes, as well as increased investment in health care and social security.

“It is significant that the leaders of the world’s two largest economies – the USA and China – are pursuing some crucial policies that reduce inequality, including higher taxes on rich people and action against monopolies,” it said. “This is just a beginning, but it provides opportunities for a new economic consensus to emerge.”

China’s income and wealth inequality is worse than that of European countries, but it is better than in the US and many Latin American and African countries, data from international studies has shown.

Premier Li Keqiang’s comments in May 2020 – that 600 million Chinese, or 42.9 per cent of its total population, live on an average monthly income of 1,000 yuan – helped draw attention to the country’s inequality problem.

David Malpass, president of the World Bank Group, warned of how the coronavirus crisis has worsened the rich-poor gap, and particularly the within-country inequality of emerging markets and developing economies.

“This increasing divergence of fortunes is especially troubling, given the possibility of social discontent in developing countries,” Malpass wrote in the foreword of January’s edition of Global Economic Prospects.

China’s National Bureau of Statistics (NBS) said its income-based Gini index was 0.465 in 2016 and was unchanged in the last release for 2019, which is higher than the international alert level of 0.4. A reading of 1.0 represents complete inequality, while 0.0 signifies absolute equality.

According to the annual report released by the World Inequality Lab last month, the bottom 50 per cent of Chinese adults earn about 25,520 yuan (US$4,000) a year, while the top 10 per cent of the population earns, on average, 14 times more at 370,210 yuan.

The gap is bigger than in most developed economies. In Japan, the top 10 per cent earn 13 times as much as the bottom 50 per cent; in Australia and Germany, it’s 10 times as much; and in France, it’s seven times greater.

However, China’s figure is smaller than that of the US, where the top 10 per cent earn 17 times as much as the bottom 50 per cent. The gap in some other countries is as follows: 19 times in Indonesia; 14 times in South Korea; 31 times in Mexico; 14 times in Russia; 23 times in Turkey; 22 times in “poor and very unequal” India; 29 times in Brazil; and 63 times in South Africa, one of the most unequal countries.

“Post-2005, [China’s] investments in health, education and infrastructure in rural areas helped keep inequality in check, but wealth inequality continued to increase at the very top of the social pyramid,” the World Inequality Lab report said.
The data showed that the top 10 per cent of China’s population owns almost 70 per cent of the total national wealth, higher than 64.6 per cent in India, 59.6 per cent in Germany, 59.5 per cent in France, 60.2 per cent in Indonesia, 56.2 per cent in Australia, 57.8 per cent in Japan and 58.5 per cent in South Korea.

However, it beats the US, where 10 per cent owns 71 per cent of wealth. That percentage increases to 74.1 per cent in Russia, 78.7 per cent in Mexico, and 79.8 per cent in Brazil.

Ren Zeping, an economist with Soo Chow Securities, said there were four groups of countries, in terms of inequality: fairly equal nations, such as Japan; developed countries with great wealth disparity, such as the United States; those falling in an inequality trap, such as India; and developing countries with more controllable inequality.

“China belongs in the fourth group, as its income gap is higher than the global average but its wealth disparity is relatively low,” Ren wrote in a column for web portal Sina.com in early January. “Its income inequality and rich-poor gap are being kept in a reasonable range and won’t curtail economic growth.”

The Chinese wealth gap has widened particularly due to the ownership of flats, which is the biggest source of household wealth and debt, according to Ren’s research.

The wide rich-poor gap helps explain Beijing’s push since last year for common prosperity – a strategy that has shifted the country’s policy direction.

China’s leadership has denied that the common-prosperity goal will equate to a Robin Hood-style “rob from the rich to give to the poor” plan, but it has also vowed to address income disparity through taxes, social security and direct government transfers, with the goal of creating an olive-shaped distribution structure in which middle-income groups account for most wealth.

While vowing to eliminate “unreasonable incomes” and illegal revenue, Chinese authorities are also encouraging wealthy individuals and companies to give back more to society.

Additionally, more Chinese cities will pilot a property tax plan from this year, though the tax rate and scope of levy remain unclear.

Government data released this month shows that progress has been made in narrowing the rich-poor and regional gap, as per capita disposable income rose 8.1 per cent to 35,128 yuan last year, in line with the expansion of the gross domestic product.

Source : SCMP

Ten Richest Men Double Their Fortunes in Pandemic While Incomes of 99 percent of Humanity Fall

The world’s ten richest men more than doubled their fortunes from $700 billion to $1.5 trillion —at a rate of $15,000 per second or $1.3 billion a day— during the first two years of a pandemic that has seen the incomes of 99 percent of humanity fall and over 160 million more people forced into poverty.

“If these ten men were to lose 99.999 percent of their wealth tomorrow, they would still be richer than 99 percent of all the people on this planet,” said Oxfam International’s Executive Director Gabriela Bucher. “They now have six times more wealth than the poorest 3.1 billion people.”

In a new briefing “Inequality Kills,” published today ahead of the World Economic Forum’s Davos Agenda, Oxfam says that inequality is contributing to the death of at least 21,000 people each day, or one person every four seconds. This is a conservative finding based on deaths globally from lack of access to healthcare, gender-based violence, hunger, and climate breakdown.

“It has never been so important to start righting the violent wrongs of this obscene inequality by clawing back elites’ power and extreme wealth including through taxation —getting that money back into the real economy and to save lives,” she said.

Billionaires’ wealth has risen more since COVID-19 began than it has in the last 14 years. At $5 trillion dollars, this is the biggest surge in billionaire wealth since records began. A one-off 99 percent tax on the ten richest men’s pandemic windfalls, for example, could pay:

  • to make enough vaccines for the world;
  • to provide universal healthcare and social protection, fund climate adaptation and reduce gender-based violence in over 80 countries;
  • All this, while still leaving these men $8 billion better off than they were before the pandemic.

“Billionaires have had a terrific pandemic. Central banks pumped trillions of dollars into financial markets to save the economy, yet much of that has ended up lining the pockets of billionaires riding a stock market boom. Vaccines were meant to end this pandemic, yet rich governments allowed pharma billionaires and monopolies to cut off the supply to billions of people. The result is that every kind of inequality imaginable risks rising. The predictability of it is sickening. The consequences of it kill,” said Bucher.

Extreme inequality is a form of economic violence, where policies and political decisions that perpetuate the wealth and power of a privileged few result in direct harm to the vast majority of ordinary people across the world and the planet itself.

“The world’s response to the pandemic has unleashed this economic violence particularly acutely across racialized, marginalized and gendered lines. As COVID-19 spikes this turns to surges of gender-based violence, even as yet more unpaid care is heaped upon women and girls,” Bucher said.

  • The pandemic has set gender parity back from 99 years to now 135 years. Women collectively lost $800 billion in earnings in 2020, with 13 million fewer women in work now than there were in 2019. 252 men have more wealth than all 1 billion women and girls in Africa and Latin America and the Caribbean combined.
  • The pandemic has hit racialized groups hardest. During the second wave of the pandemic in England, people of Bangladeshi origin were five times more likely to die of COVID-19 than the White British population. Black people in Brazil are 1.5 times more likely to die from COVID-19 than White people. In the US, 3.4 million Black Americans would be alive today if their life expectancy was the same as White people —this is directly linked to historical racism and colonialism.
  • Inequality between countries is expected to rise for the first time in a generation. Developing countries, denied access to sufficient vaccines because of rich governments’ protection of pharmaceutical corporations’ monopolies, have been forced to slash social spending as their debt levels spiral and now face the prospect of austerity measures. The proportion of people with COVID-19 who die from the virus in developing countries is roughly double that in rich countries.

“The COVID-19 pandemic has revealed openly both the motive of greed, and the opportunity by political and economic means, by which extreme inequality has become an instrument of economic violence,” said Bucher. “After years now of researching and campaigning on the issue, this is the shocking but inevitable conclusion that Oxfam has had to reach today.”

Despite the huge cost of fighting the pandemic, in the past two years rich country governments have failed to increase taxes on the wealth of the richest and continued to privatize public goods such as vaccine science. They have encouraged corporate monopolies to such a degree that in the pandemic period alone, the increase in market concentration threatens to be more in one year than in the past 15 years from 2000 to 2015.

Inequality goes to the heart of the climate crisis, as the richest 1 percent emit more than twice as much CO2 as the bottom 50 percent of the world, driving climate change throughout 2020 and 2021 that has contributed to wildfires, floods, tornadoes, crop failures and hunger.

“Inequality at such pace and scale is happening by choice, not chance,” Bucher said. “Not only have our economic structures made all of us less safe against this pandemic, they are actively enabling those who are already extremely rich and powerful to exploit this crisis for their own profit.”

The report notes the significance of the world’s two largest economies —the US and China—starting to consider policies that reduce inequality, including by passing higher tax rates on the rich and taking action against monopolies. “This provides us some measured hope for a new economic consensus to emerge,” said Bucher.

Oxfam recommends that governments urgently:

  • Claw back the gains made by billionaires by taxing this huge new wealth made since the start of the pandemic through permanent wealth and capital taxes.
  • Invest the trillions that could be raised by these taxes toward progressive spending on universal healthcare and social protection, climate change adaptation, and gender-based violence prevention and programming.
  • Tackle sexist and racist laws that discriminate against women and racialized people and create new gender-equal laws to uproot violence and discrimination. All sectors of society must urgently define policies that will ensure women, racialized and other oppressed groups are represented in all decision-making spaces.
  • End laws that undermine the rights of workers to unionize and strike, and set up stronger legal standards to protect them.
  • Rich governments must immediately waive intellectual property rules over COVID-19 vaccine technologies to allow more countries to produce safe and effective vaccines to usher in the end of the pandemic.

Bucher said: “There is no shortage of money. That lie died when governments released $16 trillion to respond to the pandemic. There is only a shortage of courage and imagination needed to break free from the failed, deadly straitjacket of extreme neoliberalism. Governments would be wise to listen to the movements —the young climate strikers, Black Lives Matter activists, #NiUnaMenos feminists, Indian farmers and others – who are demanding justice and equality”.

Source : Oxfam

Read more

Inequality Kills . . . . .

Charts: Global Wealth Inequality

Charts: One Reason for China’s New Emphasis on ‘Common Prosperity’ — Widening Wealth and Income Gaps

Source : Caixin

Read the article . . . . .

Infographic: The Racial Wealth Gap in the U.S.

See large image . . . . . .

Source : Visual Capitalist