NEW YORK – Concern about economic inequality is in the air almost everywhere. The issue is not inequality between countries, which is actually down in recent decades, thanks in large part to higher growth rates and longer lifespans in many emerging countries (especially China and India). Rather, the focus nowadays is on inequality – sometimes called income disparity – within countries.
One reason is that the problem of inequality is real – and growing worse in many places. In recent decades, wealth and income have become more concentrated at the top – the so-called 1% – while real incomes and standards of living for the poor and middle class in many developed countries have stagnated or declined.
This was true before the global financial crisis erupted in 2008, but the crisis and its aftermath (including prolonged high levels of unemployment) have made things worse. And, despite a few notable exceptions in northern Europe and parts of Latin America, the rise in inequality has affected the developed and developing worlds alike.
Prominent people are calling attention to the problem as never before. Pope Francis exhorts the world to say “‘thou shalt not’ to an economy of exclusion and inequality,” because “such an economy kills.” US President Barack Obama speaks about an American economy that has become “profoundly unequal.” The recently elected mayor of New York City, Bill de Blasio, made the issue the centerpiece of his campaign, repeatedly referring to a “tale of two cities” and an “inequality crisis.”