You would think a question like ‘is inequality going up or down?’ would be relatively easy to answer, but sadly it is not.

The first thing to say is that the data is not good, but that we do know that the problem is strongly biased in one direction – inequality is systematically underestimated.  We also know the data for developing countries is much worse than that for rich nations. The main method used is to calculate a country’s Gini coefficient (a number between 0 and 1, where 1 is perfect inequality and 0 is perfect equality).

The Gini is calculated using household surveys or census data.  This data has been shown to systematically underestimate the incomes of the richest part of society.

So what can we conclude from all this?

  1. It is a good thing that global income inequality has reduced, but it remains very high indeed.
  2. Global wealth inequality has increased. Wealth inequality levels are systematically higher than income inequality.
  3. The majority of countries have seen an increase in income inequality in the last three decades, with sharp increases in the most populated countries.

Read the full article by Max Lawson about inequality on From Poverty to Power