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“We only found one country who had actually raised corporation tax, and that was Chile,” Lawson explained. “If we don’t do something proactive about this global trend, we could see the de facto end to corporate tax in our lifetimes. Sweden is named the country most committed to reducing inequality, and Nigeria – Africa’s richest country by GDP – the least committed of the 152 countries ranked. The cumulative income or wealth of the population is plotted on the vertical axis. 2 Income inequality among Asians in the U.S. nearly doubled from 1970 to 2016. The IMF and World Bank have a goal to help improve income of the lowest 10% of earners in all countries … Lesotho is a lower-middle-income country with high poverty rates and unemployment rates. While Britain’s tax structure is ranked only 96th in the new inequality index, it rises to 33rd on tax overall because of its relatively robust ability to collect tax revenues. These are the 10 cities with the highest income inequality: Atlanta, GA; New Orleans, LA; Miami, FL So for the new Commitment to Reducing Inequality index, researchers looked at how much governments set aside in their annual budgets for each of 18 key indicators. Researchers found that Zimbabwe spent an astonishing 29% of its budget on education for each of the last three years. Globally, women do the bulk of domestic labour and care work, which subsidises national economies for little or no reward. Inequality is notoriously difficult to measure. The U.S. has the highest Gini coefficient among the G7 nations. About 33 million U.S. workers earn less than $10 per hour, placing a family of four below the poverty line. But when the impact of taxes and social spending are factored in, the wages of the richest are reduced dramatically, becoming 66 times higher than the poorest, according to the World Bank. The Nordic countries and Central Eastern European countries are among the most equal countries. But countries with historically low levels of income inequality have experienced significant increases over the past decade, too, including Denmark, Sweden and Germany, the OECD recently reported. Lesotho has a Gini coefficient of .632, making it have the highest income inequality in the world. Poverty is relatively widespread, with about 42.4% of the population living below the poverty line and about 23.55 of the population living in extreme poverty. Many European countries have some of the lowest Gini coefficients, such as Slovakia, Slovenia, Sweden, Ukraine, Belgium, and Norway. The top 1% of earners in the United States earn about 40 times more than the bottom 90% of earners. While unemployment is at 10% in Zambia, about 84% of those employed are in the informal sector, such as agricultural (50% of the population) with low earnings. ... by the 10% people with highest disposable income divided by the share of all income received by the 40% people with the lowest disposable income. In total, full data were available for 84 countries (24 from low income, 34 from middle income and 26 from high income countries). “But there’s still a really positive and important story in African countries like Ethiopia and Mozambique in particular, where primary education is now free. When it comes to the two largest countries in the region, the top share of national income of the top 10% in India rose from 30% in the 1980s to over 56% today and in China from 28% to 41%. It is no different when it comes to the countries with the worst income inequality, since this list can tell us a lot about income distribution, social policy, and the level of … Poverty and social inequality. 6 Portugal: 0.344 And inequality is even higher in emerging economies. Denmark and Sweden lead the list of the countries with the least income inequality among the EU countries with a Gini coefficient score of 24.8 and 24.9 respectively. Inequality in Jamaica is lower than in most countries in the Latin America and Caribbean region, but poverty at 19% in 2017 is still significant. Additionally, the Gini coefficient may be inaccurate and overstate income inequality due to limitations such as a lack of reliable and up-to-date GDP and income information. As a result, Asians displaced blacks as the most economically divided racial or ethnic group in the U.S. Also, social mobility is lower in countries with high inequality, such as Italy, the United Kingdom and the United States, and higher in the Nordic countries where income is … But the Gini index gives users no sense of the root causes of inequality, which are complex and multiple. In South Africa, the wealthiest 10% own 71% of the wealth, while the poorest 60% own just 7%. In Asia, within-country inequality has been rising dramatically since the 1980s to an average of 48.5%. On the flip side, Denmark, Slovenia, and Czech Republic have the lowest. Liberia, for example, has the world’s highest minimum wage compared to GDP per capita; in the US, the minimum wage has been frozen at $7.25 since 2009. “What we want to be very clear about is that inequality is not inevitable, but the direct result of a government’s policy choices,” said Lawson. One may think that it is primarily due to differences in regional prices—for example, $100 can buy more goods and services in … Poverty is high in Haiti, with about 59% of Haitians living on less than $2 per day and GDP growth is very slow. Furthermore it is possible for the Gini coefficient of a developing country to rise (due to increasing inequality of income) while the number of people in absolute poverty decreases. Despite this, Botswana has a Gini coefficient of .605. “These countries are putting almost a fifth of their budgets into education, and more kids are being educated than ever before, in the context of an exploding population,” he said. “If you compare this amount of spending somewhere like the UK, it’s pretty remarkable. In a country where everyone has the same income, the Gini coefficient would be 0. About 1 in 5 Hong Kong residents live below the poverty line. Palestine had the highest spend on minimum wage in the world – and also scored highly on labour rights, ranking eighth overall. High-income and low-income countries can have the same Gini coefficient. Last modified on Fri 15 Sep 2017 07.19 EDT. Namibia has very high rates of poverty and unemployment at 29.9% and 26.6% respectively, despite the country’s relatively high economic growth. Liberia has the world’s highest minimum wage compared to its GDP per capita. Researchers at Oxfam and Development Finance International have spent a year investigating 18 indicators across three policy areas that have a key impact on levels of inequality: taxation, social spending on sectors such as health, welfare and education, and labour rights. The countries that fared best on social spending were, unsurprisingly, European nations who established robust welfare states after the second world war. Comparisons of income inequality across countries are often based on the Gini coefficient, another commonly used measure of inequality. Income inequality is most obvious in rural areas where more poverty and intergenerational inequality exist. But the index doesn’t capture the key drivers of inequality in the country: protracted occupation, recurrent conflict and the denial of Palestinian rights. Paraguay has a Gini coefficient of .517. “Rich countries tend to do badly on tax because it’s been very much the accepted wisdom to push taxes onto the consumer with VAT,” he added. Latin America has long suffered from one of the worst levels of income inequality in the world. High-income and low-income countries can have the same Gini coefficient. Mathematically, the Gini coefficient is defined based on the Lorenz curve. Income distribution and Gini indexes for high-income economies are calculated directly from the Luxembourg Income Study database, using an estimation method consistent with that applied for developing countries. Overall, Britain is ranked 17th in the new index. The indigenous, non-Spanish-speaking population has limited access to education and opportunities and 90% of the indigenous population live below the poverty line. This is because the Gini coefficient measures relative, not absolute, wealth. Additionally, about 55.5% of South Africans live in poverty, earning less than $83 per month. Income inequality is how unevenly income is distributed throughout a population. When it comes to the two largest countries in the region, the top share of national income of the top 10% in India rose from 30% in the 1980s to … Income inequality has both economic and political impacts on a nation. In 2014, the UK government spent 11.78% of its budget on education, while Zimbabwe, which came top, spent almost three times this amount. The top-to-bottom income ratio among Asians increased 77% from 1970 to 2016, a far greater increase than among whites (24%), Hispanics (15%) or blacks (7%). This is, unsurprisingly, rooted in low levels of or lack of education. Multilevel, epidemiological studies that have been carried out in the United States and in Europe indicate that a disparity between the rich and the poor, or ‘income inequality’, relates to both morbidity and mortality in the population above and beyond the effects of individual-level income.1–5 A numbe… The average income of the richest 10% of the population is about nine times that of the poorest 10% across the OECD, up from seven times 25 years ago. The 23 Countries With the Most Extreme Income Inequality In some countries, the richest earners make a lot more money than in others. The Lorenz curve plots the percentiles of the population on the horizontal axis of the graph according to income or wealth, whichever is being measured. Income share held by lowest 20% World Bank, Development Research Group. Zambia’s income inequality has slowly risen over the past several years. The UK’s lack of investment in education and low tax rates put it 17th in a new Oxfam inequality index – which ranks Sweden top out of 152 countries, and Nigeria bottom, Mon 17 Jul 2017 01.45 EDT Income inequality is declining in Botswana due to regional convergence caused by fast growth in rural areas. Trump’s tax proposal would push US below Greece, UN’s sustainable development goals for education, The best- and worst-performing countries across three policy areas that have a significant impact on inequality, The UK scores highly on labour rights, but falls down on tax and education spending, Low-income countries spend a much larger proportion of their budget on education than high-income countries. The country also has one of the best pupil-teacher ratios in the world. Guatemala’s Gini coefficient is .53. The IHDI, estimated for 151 countries (includes the world and other 150 specific … Alaska has the lowest levels of income inequality in both time periods Income inequality increased the fastest in Montana on both a point change and percent basis (2.17 points and 4.97% respectively) Inequality increased the slowest in Wyoming on both a point change and percent basis (.29 points and.68% respectively) Countries that showed the lowest levels of income equality included the Czech Republic, Finland, Slovakia, Slovenia, Belgium and the Netherlands, which showed a ratio of over 3.5. Lawson says rich countries particularly fall down on their toothless corporation tax – the G20 average has declined from 40% in 1990 to 28.7% in 2015. The country is consistently rated as one of the world’s most unequal on the Gini index, demonstrating that a more nuanced approach to inequality statistics can yield dramatically different results. … Stronger and more resilient economic growth is needed to eliminate poverty and boost shared prosperity. “The UK has slashed corporation tax a bit further and a bit faster than most other rich countries,” said Max Lawson, head of inequality policy at Oxfam International. Income inequality refers to the extent to which income is distributed in an uneven manner among a population. The Gini coefficient or Gini index is a statistical measure of distribution to represent the income or wealth of a country’s residents. Despite the widespread inequality, Paraguay has reduced its poverty significantly in recent years as its economy continues to grow and is expected to continue to do so in the coming years. Therefore, the gross national income measures both the domestic income of a country and the income it receives from abroad. It is based on the Lorenz curve, a cumulative frequency curve that compares the distribution of a specific variable (for example, income) with the uniform distribution that represents equality. But even in countries with a high Gini ratio (and thus, high inequality), at least new generations can work hard, ascend the income ladder, and join the top 20 percent, right? The gap between the richest and the poorest has never been wider. Top countries with most economic inequality The world has reached unsustainable levels of economic inequality, where the richest 1% of the world population owns more wealth than the remaining 99% Zambia As executive pay becomes increasingly complicated, the share of profits going to labour in the form of wages has fallen, while the share going to capital (dividends, interest and the retained profits of companies) rises. This is much longer than other estimates of income inequality allow (as is the case with estimates that rely on income survey data). The Nordic countries – Norway, Sweden, Denmark, and Finland – typically have considerably less income and wealth inequality, thanks to both robust social safety nets and progressive taxation. The wealthiest 10% of the population hold about 50% of the wealth and the poorest 10% own less than 1%. The wealthiest 10% earn nearly 44 times more than the poorest 10%. On this metric, the income gap in South Africa is astronomical – the incomes of the richest decile are more than 1,000 times higher than the poorest. Those employed in the formal sector each about 2.5 times what informal employees earn. While real wages have stagnated in the UK, CEO pay continues to rocket, unaffected by sluggish growth. Wherever possible, consumption has been used rather than income. Sweden is named the country most committed to reducing inequality, and Nigeria – Africa’s richest country by GDP – the least committed of the 152 countries ranked. Women are also overrepresented in the lowest-paid jobs and precarious forms of employment. Different poverty levels. In many countries, income inequality has increased as poverty also increases. Inequality is generally lower in European nations than it is in non-European nations. Oxfam found that only half of the 152 countries have laws forbidding gender discrimination or mandating equal pay. Income inequality across a population is quantified using the Gini coefficient measure. Now, we decided to see what metro areas have the highest and lowest income inequality. The “Nordic model” is often celebrated as an alternative to the United States’ escalating inequality. Income disparities are so pronounced that America’s top 10 percent now average more than nine times as much income as the bottom 90 percent, according to data analyzed by UC Berkeley economist Emmanuel Saez. Despite this, younger men and women are increasingly working in sectors that are more productive and pay better, helping to close the income gap. When we were that poor, we didn’t spend anything like that much of our budget on education, which was largely provided through charities or the church.”. Your support powers our independent journalism, Available for everyone, funded by readers. Austria, where employers with more than 25 staff must ensure at least 4% of their employees are disabled, topped the labour rankings. The Gini Coefficient. Latin America is frequently deemed to have the highest levels of inequality in the world, while Thailand, Malaysia and pre-revolution Iran had unusually high inequality relative to their regional peers. Developed by Italian statistician Corrado Gini in 1912, the Gini coefficient is the most commonly used measure of inequality. The ten countries with the lowest income inequality are: The United States’ Gini coefficient is .485, the highest it’s been in 50 years according to the U.S. Census Bureau. Many consider the NHS to be the crowning glory of the UK’s welfare state. Income inequality is defined as a measure that highlights the gap between different individuals' or households' disposable income in a particular year and in a given country. © 2021 Guardian News & Media Limited or its affiliated companies. "The evidence s hows that high inequality … This can partly be explained by the demographics in developing countries, according to Lawson. Most of the case study countries had comparatively high levels of income inequality prior to the inequality decline. Below are the nations with the worst income inequality according to … The Gross National Income, or GNI, represents the sum of a nations Gross Domestic Product (GDP) plus any other net income received from overseas. Namibia’s Gini coefficient is .597, a big improvement from its 2003 coefficient of .633. “There are, relatively, a lot more young people in poorer countries, which is a structural factor that makes education more important for their governments.”. The Gini coefficient measures the distribution of incomes across income percentiles. Women are hit hardest by wage inequality. But, as the report points out, many of these – including the UK – are “trading on past glories”, while governments have worked to erode welfare provision, particularly after the 2008 financial crisis. There are areas of the country that are more equal than others, however. The inequality in Namibia is considered to be a ticking time bomb and will involve improving education and investing in creating sustainable jobs in order to fix it. The Gini coefficient condenses the entire income distribution for a country into a single number between 0 and 1: the higher the number, the greater the degree of income inequality. (As a benchmark, achievement of the UN’s sustainable development goals for education is calculated to require a 20% spend.). High-income countries tended to fare much worse than low-income countries on education spending. 1, with raw regression line in black for whole population, blue for … Most talk of income inequality focuses on the problems of the very poor or the broader socioeconomic implications of rising inequality. The richest Brits now control 31% of the income, with the poorest 10% claiming just over 1% of the country's wealth. Yet as the disparity between rich and poor continues to widen in many developed countries such as the United States, Latin America is one of the few … Countries are typically assessed using the Gini index, which measures the distribution of income and wealth, and ranks a country between zero (absolute equality) and one (absolute inequality). Adjusted for inflation, this means a minimum wage worker is now worse off than they were 50 years ago. The notion that the distribution of wealth and consumption within societies could be a health determinant has attracted a great deal of attention in public health research. One of the world’s poorest countries at its independence in 1966, Botswana has since made great strides in development, expecting to become a high-income country by 2036. The Gini coefficient is often calculated from pre-tax income inequality. Using 2018 data from the World Economic Forum (WEF), we compiled a list of countries with the largest income disparity, also known as "income inequality." But its well-documented funding crisis means the UK was ranked 77th for health spending – just above the tiny island nation São Tomé and Príncipe. The coefficient ranges from 0 (0%) to 1 (100%), with 0 representing perfect equality and 1 representing perfect inequality. In January, the top line from another Oxfam inequality report went viral: just eight men – mostly Silicon Valley CEOs – own the same wealth as half the world’s population. This remains a serious problem as for every Carlos Slim the region produces there are tens of millions more that live in poverty. With only about 50% of children attending school, the lack of education in Haiti has made is difficult for about two-thirds of people to find formal jobs that pay them well. Inequality is generally lower in European nations than it is in non-European nations. While this is an extreme snapshot of income inequality, the gap between the wages of bosses and workers has been growing across the board: in the UK, the average FTSE executive now earns 386 times the income of a minimum wage worker. The top 20% of households in Haiti hold 4% of the total wealth in the country. Over the past two decades, Lesotho has reduced its poverty rate significantly, making strides to reduce its Gini coefficient and create more equality; however, it remains the most unequal country for income in the world. From this data, released in 2019, we ranked the 25 countries with the most unequal income distributions. If a single resident earned all of the income while everyone else earned nothing, the coefficient would be 1. Regional inequality: facts and forces. The UK’s lack of investment in education and relatively low tax rates have created a highly unequal society in which the poor are “often unable to cover living costs”, according to a new report that assesses 152 countries for their commitment to reducing inequality levels. With a Gini coefficient of .0625, South Africa is the second-most unequal country in the world. Disparity of income between regions has been large in many advanced countries. In 2015, the UK government spent 4.7% of the country’s GDP on education, down from 5.8% in 2010. Despite having experienced strong growth for many years since the turn of the millennium, one in 10 Nigerian children still die before their fifth birthday, and an estimated 112 million people live in poverty. Poverty lines shown here include $1 a day, $1.25 a day, $1.45 a day, $2 a day (typical for many developing countries), $2.50 a day (which includes a poverty level for some additional countries), and $10 a day, which a World Bank report referred to if looking at poverty from the level of a wealthy country, such as the US.

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