Syllabus: Inclusive growth and issues arising from it.
Extent of Inequality
- As per the Global Inequality Report, 83% of countries face high income inequality, covering 90% of global population.
- A Gini coefficient above 0.4 indicates high inequality
- Gini co-effiient of 0 means perfect equality, 1 means total inequality.
Shift in Income Distribution
- Between 1990 and 2024, the capital share of national income rose in 56% of countries, covering 74% of the world’s population.
- Rising capital income through profits, rents, and dividends reduced the share of labour income from wages and salaries.
Unequal Capital Ownership
- Around 85% of people globally earn no income from capital.
- In India, 97% of citizens live in households earning below $100 per person annually from capital sources.
Widening Labour Gap
- From 2019 to 2024, global CEO pay increased by 50%, while average worker pay rose by less than 1%.
Consequences of Inequality
- Private wealth now far exceeds public wealth, causing many governments to incur net debts.
- Economic inequality has led to social disparities; in the U.S., African American women are twice as likely to die in childbirth as white women or women in Kerala.