Tikalon Blog by Dev Gualtieri

World Inequality 2022

January 24, 2022

Tikalon's home in Northern New Jersey is just a short commuter train ride from New York City. That's the reason why our local television news originates from the many New York City television stations and is intermixed with New York City news and news about Connecticut, the third member of our tri-state area. The major news of the first month of 2022 was the January 9, 2022, Bronx apartment fire that killed seventeen people, including eight children.[1] It was the deadliest apartment fire in New York City in more than 30 years.[1]

This fire was in a 129 unit high-rise apartment building constructed in 1972 to provide affordable housing. Housing of this type is colloquially known as project housing, and such housing is typically housing of last resort for many people. The cause of the fire was apparently a malfunctioning electric space heater in one apartment. Although the fire was largely confined to that one apartment, two self-closing doors somehow stayed open, this caused the spread of thick smoke, and it caused the smoke inhalation deaths of all decedents.[1] Since this building had received federal subsidies, it appears that fire protection rules about fire sprinklers were different from city requirements.[1]

I was a member of the research laboratory safety team at my previous employer, and we were trained to look for the root cause of laboratory accidents in order to institute policies to prevent similar accidents. If you examine this tragic fire, you might focus on electric space heaters and faulty door mechanisms as root causes. My root cause assessment is different. The root cause of these deaths was poverty.

Technology has given us many marvels, but we're still a long way from utopia. Everyone seems to have a smartphone, but many people still have difficulty paying for the basic necessities of food, shelter, and health care. There was a thriving middle class in the United States in the early 1950s. At that time, single income households could maintain a very comfortable lifestyle, as parodied in the song, "Pleasant Valley Sunday," by The Monkees. Since that time, job opportunities for the middle class have decreased to the point at which even a two income family has a difficult life experience. At the same time, continuing the validity of the centuries-old catchphrase, "The rich get richer and the poor get poorer," wealth has become increasingly concentrated in a very small number of people.

I've written about wealth inequality in several previous articles (The Entropy of Nations, January 22, 2014, Income Inequality and Geometrical Frustration, March 20, 2017, and Transitioning to Utopia, August 29, 2016). One descriptive measure of income inequality and wealth inequality is the Gini coefficient, the value of which ranges from zero to one. Perfect equality is expressed by a Gini coefficient of zero, whereas a Gini coefficient near one represents the case in which just a few individuals have most of the wealth. The trend in the coefficient, as shown in the figure, is quite instructive.

Gini coefficient for the United States from 1967-2020. (Graphed using Gnumeric from United States Census Bureau data in ref. 2, and also uploaded to Wikimedia Commons. Click for larger image.)

The World Inequality Lab of the Paris School of Economics has recently issued its 2022 World Inequality Report, licensed under the Creative Commons License 4.0, that contains income and wealth inequality data through 2021.[3-4] This inequality can be seen in the following table that lists the numbers of global millionaires and billionaires, and a chart that summarizes income and wealth distribution. In 2021, there were 168 individuals with a net worth of greater than $10 billion. According to Wikipedia, there are about 200 countries whose annual budget is less than $10 billion.

Table 1. Global millionaires and billionaires, 2021
Wealth Group	Number
1 million - 10 million	60,319,510
10 million - 100 million	1,769,200
100 million - 1 billion	73,710
1 billion - 10 billion	2,582
10 billion - 100 billion	159
> 100 billion	9

Global inequality in 2021.

Based on purchasing power parity, the bottom 50% captures just 8% of total income and 2% of household wealth, while the top 10% has 52% of total income and 76% of total household wealth.

(Data from fig. 1 of ref. 3,[3] graphed using Gnumeric. Click for larger image.)

According to the report, the average adult individual earned $23,380 and owns $102,600 in 2021. While this appears to be a comfortable average, an individual from the top 10% earns $122,100 per year, whereas an individual from the poorest half makes $3,920 per year.[3] Inequality in wealth is more extreme than income inequality, with the poorest half having essentially no net worth (just 2% of the total), while the richest 10% of the global population own 76% ($771,300 on average) of all wealth.[3] Europe is the most equal region of the world, while the Middle East and North Africa are the most unequal. The world map of inequality (see figure) reveals that national average income is not a good predictor of inequality, since high-income countries, such as the United States, are very unequal.[3]

World map of income inequality. Europe is more equitable than the United States. income is measured after pension benefits and unemployment payments received, but before taxes paid. For Brazil, the bottom 50% earns 29 times less than the top 10%. (Fig. 3 of ref. 3.[3] Image licensed under the Creative Commons License 4.0. Click for larger image.)

Income and wealth inequality has increased nearly everywhere since the 1980s, the probable cause being deregulation and liberalization programs in many countries.[3] The rise in inequality hasn't been uniform. For example, the United States, Russia and India have seen a rapid rise in inequality, while European countries and China have had a relatively smaller rise.[3] The current global inequality levels are close to those of the early 20th century, at the peak of Western imperialism.[3] Interestingly, while inequality has increased within most countries, the inequality between countries has declined.[3] There was a considerable decrease from a factor of fifty to a factor of forty in the gap between the average incomes of the richest 10% of countries and the average incomes of the poorest 50% of countries.[3] However, there was a significant increase in inequality within countries with the gap between the average incomes of the top 10% and the bottom 50% of individuals within countries nearly doubling.[3]

Affluence, at least among the very rich, has come with a correspondingly large carbon footprint, with North America being a prime culprit (see figure).

per capita carbon dioxide equivalent emission by region in 2019. The personal carbon footprints include emissions from domestic consumption, public and private investments as well as import and export of carbon embedded in goods and services traded with the rest of the world, with emissions split equally among household members. (Data from fig. 15 of ref. 3,[3] graphed using Gnumeric. Click for larger image.)

World Inequality 2022

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