Global wealth inequality continues to increase as over half of population says system has failed

Two studies released ahead of the World Economic Forum Annual Meeting in Davos-Klosters, Switzerland, reveal that income and wealth inequality continues to grow across the globe, particularly in the United States and other developed countries.

The World Economic Forum, a Swiss non-profit, released its 2017 Inclusive Growth and Development Report Monday, which found individual, yearly median income fell by an average of 2.4 percent in all 26 “First World” countries between 2008 and 2013. GDP growth averaged less than a one percent gain in these same countries over the six year period.

Among 30 of the world’s most advanced economies, the U.S. ranked second-to-last in net income and wealth equality, 28th in poverty and fourth in median income — making the world’s oldest constitutional democracy one of a handful of countries where “growth has not translated as well into social inclusion.”  Other nations given this designation include Japan, South Africa, Mexico and Brazil.

WEF also developed a new comprehensive indicator called the Inclusive Development Index (IDI), which ranks countries based on 12 economic and social well-being factors like equality, unemployment, life expectancy, national debt and carbon pollution.

The U.S. also ranked in the bottom half among First World countries on this scale, coming in at number 23, while the countries that fared the best all are located in northern and central Europe, including Norway, Switzerland, Iceland and Denmark.  Australia rated eighth, while Germany, Canada and the UK all fell outside the top 10.

WEF also found the U.S. ranked first in the world for small business ownership, fourth in labor productivity, 12th for employment, 20th and 28th in education and life expectancy, respectively.

Norway, which received the highest overall IDI score, was surprisingly able to increase its living standards by an impressive 10.6 percent, disproportionate to its anemic economic growth from 2008–2013.

A second report released Monday by non-governmental organization conglomerate Oxfam International, entitled “An Economy for the 99%”, found that the world’s eight richest individuals own as much wealth as 50 percent of entire population.

According to Forbes “500 Richest” list, Microsoft co-founder Bill Gates, Spanish businessman Amancio Ortego, investor and financier Warren Buffet, Mexican businessman Carlos Slim Helú, Amazon founder Jeff Bezos, Facebook co-founder Mark Zuckerberg, Oracle co-founder Larry Ellison and Bloomberg LP founder and owner Michael Bloomberg, have a combined net worth of $426.2 billion.

In January 2016, a separate Oxfam study reported that the wealthiest one percent of people in the world have more material wealth than the bottom 99 percent.

In order to combat growing wealth inequality, the 2017 report suggests four main policy reforms: Increase tax rates for the top income brackets across-the-world to 50–70 percent; end individual and corporate tax havens; end the global “race to the bottom” on corporate tax rates; and increase minimum wages.

One of the real effects of global wealth inequality has reverberated throughout the political systems of countries with advanced economies in the form of populist movements, most notably in Western and Central Europe and the U.S.

Edelman, a worldwide communication firm, conducted a study in October and November 2016 among 33,000 people in 28 democratic and other large countries which found 53 percent believe keystone institutions have failed them, while less than two of every 10 said the system was working.

Countries with populations most disappointed in their government, educational system, media, etc., include France, Italy, Mexico, South Africa and Spain, while the UK and U.S. have the biggest trust gap disparity between their overall populations and the informed citizenry.

 

[Politico] [AP] [Forbes] [Photo courtesy Allianz via Whatsupic]