I blogged on this topic late last year – Inequality and the Elephant Curve – but is it correct? – and see that Paul Solman of PBS news has done his own evaluation on the topic – see video and image below. The curve shows the % change in income on the vertical axis and on the horizontal axis is the entire world population, arranged by their incomes – poorest over to the left, the richest to the right. The time period is from 1988 to 2008.
We knew that people in China and large numbers of groups in Asia who were not rich, compared to Americans, have done very well. We knew that lower and middle class Americans and Japanese and Germans have not done well. And that’s exactly what the chart shows. And we also knew that the top 1 percent in the rich countries have done well.
Everybody on that chart is above the point where we actually have zero growth. If you really were to be very cosmopolitan and look at the world as if it were one country, you would say, “Look, we have a situation that a large hunk of people — two and a half billion — have done extremely well. The level of global poverty has actually gone down. These people not only now have sewage and electricity, some have even become tourists. They have better jobs.” This is mainly resurgent Asia.
So then you say, “Well, what’s the big deal?”
The problem is that this is a very abstract view of the world, which doesn’t take any cognizance of the political reality. Because the political reality is there are all these people who have done poorly relative to the rest of the world. They feel poor people in Asia breathing down their necks because of outsourcing, because of imports and so on. And then they also see that the top 1 percent in their own countries have done very well.
They are feeling fear from both ends — from one end because the other people are catching up to them and from the other, as people from their own countries are moving further and further ahead.
Source: Branko Milanovic Author, “Global Inequality”: