Economic inequality

Economic inequality covers a wide variety of topics. It can refer to either income distribution (measuring the amount of money people are paid) or the distribution of wealth (the amount of wealth people own). Besides economic inequality between countries or states, there are important types of economic inequality between different groups of people. Important types of economic measurements focus on wealth, income, and consumption. There are many methods for measuring economic inequality, with the Gini coefficient being a widely used one. Another type of measure is the Inequality-adjusted Human Development Index, which is a statistic composite index that takes inequality into account. Important concepts of equality include equity, equality of outcome, and equality of opportunity. Research suggests that greater inequality hinders the duration of growth but not its rate. Whereas globalization has reduced global inequality (between nations), it has increased inequality within nations. In 1820, the ratio between the income of the top and bottom 20 percent of the world's population was three to one. By 1991, it was eighty-six to one. A 2011 study titled 'Divided we Stand: Why Inequality Keeps Rising' by the Organisation for Economic Co-operation and Development (OECD) sought to explain the causes for this rising inequality by investigating economic inequality in OECD countries; it concluded that following factors had a role: A 2011 OECD study investigated economic inequality in Argentina, Brazil, China, India, Indonesia, Russia and South Africa. It concluded that key sources of inequality in these countries include 'a large, persistent informal sector, widespread regional divides (e.g. urban-rural), gaps in access to education, and barriers to employment and career progression for women.' A study by the World Institute for Development Economics Research at United Nations University reports that the richest 1% of adults alone owned 40% of global assets in the year 2000. The three richest people in the world possess more financial assets than the lowest 48 nations combined. The combined wealth of the '10 million dollar millionaires' grew to nearly $41 trillion in 2008. A January 2014 report by Oxfam claims that the 85 wealthiest individuals in the world have a combined wealth equal to that of the bottom 50% of the world's population, or about 3.5 billion people. According to a Los Angeles Times analysis of the report, the wealthiest 1% owns 46% of the world's wealth; the 85 richest people, a small part of the wealthiest 1%, own about 0.7% of the human population's wealth, which is the same as the bottom half of the population. In January 2015, Oxfam reported that the wealthiest 1 percent will own more than half of the global wealth by 2016. An October 2014 study by Credit Suisse also claims that the top 1% now own nearly half of the world's wealth and that the accelerating disparity could trigger a recession. In October 2015, Credit Suisse published a study which shows global inequality continues to increase, and that half of the world's wealth is now in the hands of those in the top percentile, whose assets each exceed $759,900. A 2016 report by Oxfam claims that the 62 wealthiest individuals own as much wealth as the poorer half of the global population combined. Oxfam's claims have however been questioned on the basis of the methodology used: by using net wealth (adding up assets and subtracting debts), the Oxfam report, for instance, finds that there are more poor people in the United States and Western Europe than in China (due to a greater tendency to take on debts). Anthony Shorrocks, the lead author of the Credit Suisse report which is one of the sources of Oxfam's data, considers the criticism about debt to be a 'silly argument' and 'a non-issue … a diversion.' Oxfam's 2017 report says the top eight billionaires have as much wealth as the bottom half of the global population, and that rising inequality is suppressing wages, as businesses are focused on delivering higher returns to wealthy owners and executives. In 2018, the Oxfam report said that the wealth gap continued to widen in 2017, with 82% of global wealth generated going to the wealthiest 1%. The 2019 Oxfam report said that the poorest half of the human population has been losing wealth (around 11%) at the same time that a billionaire is minted every two days. According to PolitiFact, the top 400 richest Americans 'have more wealth than half of all Americans combined.' According to The New York Times on July 22, 2014, the 'richest 1 percent in the United States now own more wealth than the bottom 90 percent'. Inherited wealth may help explain why many Americans who have become rich may have had a 'substantial head start'. In September 2012, according to the Institute for Policy Studies (IPS), 'over 60 percent' of the Forbes richest 400 Americans 'grew up in substantial privilege'. A 2017 report by the IPS said that three individuals, Jeff Bezos, Bill Gates and Warren Buffett, own as much wealth as the bottom half of the population, or 160 million people, and that the growing disparity between the wealthy and the poor has created a 'moral crisis', noting that 'we have not witnessed such extreme levels of concentrated wealth and power since the first gilded age a century ago.' In 2016, the world's billionaires increased their combined global wealth to a record $6 trillion. In 2017, they increased their collective wealth to 8.9 trillion. Income inequality in the US is significantly worse than people think.