Worldwide income inequality
Date posted: November 27, 2012
There’s been much discussion in the United States about the increase in income inequality. This means that incomes at the top of income distribution have grown faster than incomes at the bottom of the distribution. Is this an issue confined to our country? N.C. State University economist Mike Walden answers.
“It’s actually not. … It’s really a worldwide situation. And actually income inequality is not the highest in the U.S. — we see several countries, such as Brazil and China, actually having higher income inequality than here in the U.S.
“And several factors have been pushing a less equal distribution of income. Perhaps the most major has been education. We have had a big change in the value of education over the last several decades. Translated, that means that the extra income that people get by getting higher degrees, more degrees, has actually been rising faster. People (who) have chosen not, for example, to go to college have at best treaded water, so this has created a big gap, if you will, between those with education and those without education. And this is actually a worldwide phenomenon.
“One thing to note on this, though, in particular … if you look at the U.S. data, if you look over several decades, it’s not really a matter, when we’re talking about income inequality, about the rich getting richer and the poor getting poorer. It’s more a matter of the rich getting a lot richer faster than the poor are. If you look at several decades of data, income for the lowest 20 percent of earners has been about stable when you adjust for inflation.”
Category: Economic Perspective