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Escaping the Inequality-Data Dark Ages

Even as perceptions of rising inequality undermine the foundations of democracy, data on wealth and income trends remain woefully inadequate. It is in the interest of all societies to develop an internationally recognized set of indicators and methods for tracking income, wealth, and effective tax rates accurately and transparently.

PARIS – We are living in the Dark Ages of inequality statistics. More than a decade after the “Great Recession,” governments are still unable to track accurately the evolution of income and wealth. Statistical agencies produce income-growth statistics for the population as a whole (national accounts), but not for the “middle class,” the “working class,” or the richest 1% and 0.1%. At a time when Google, Facebook, Visa, Mastercard, and other multinational corporations know intimate details about our private lives, governments still do not capture, let alone publish, the most basic statistics concerning the distribution of income and wealth.

This failure has huge costs for society. The perception that inequalities are reaching unjustifiable heights in many countries, combined with a lack of any possible informed choice for voters, is fodder for demagogues and critics of democracy.

Making matters worse, experts in the field of inequality are sometimes depicted as being overly reliant on specific methodological approaches, as illustrated in The Economist’s recent cover story, “Inequality illusions.” But, of course, data in the social sciences are by their very nature open to challenge, which makes methodological debates largely unavoidable. The question is where to draw the line between legitimate academic disagreement about inequality levels and trends and outright inequality denialism.

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