Our Perspectives

Let’s #TalkInequality


A remote village in Kyrgyzstan was hooked up to satellite phone with UNDP's support. (photo: UNDP Kyrgzstan)

Just how bad is global inequality today?

Last year, at the launch of UNDP’s Humanity Divided report, Helen Clark noted that the richest eight per cent of the world’s population earns half of the world’s total income: “Not only do 1.2 billion people continue to live on under US $1.25 dollars a day, but inequalities in income and wealth are often compounded by inequalities in access to power, and disparities in health and education.”

How did we arrive at this new polarized age and how divided are we in Europe and Central Asia? How might we sustain our development achievements with prosperity for all?  How have globalization and technological growth affected wage and earning inequalities?

UNDP’s Dialogue on Inequalities, taking place on 21-22 January in Istanbul, will discuss the threats posed by inequalities – as well as possible ways of addressing them.

As issues of inequality move into the spotlight, I’ve taken the liberty of prepping a reading list.

What’s the big deal about this Capital book I keep hearing about?

The publication of Thomas Piketty’s Capital in the Twenty-First Century made waves in 2014, significantly advancing the discussion of rising inequality around the world.

Matt Yglesias offers a “short guide” to the book, while Paul Krugman writes an in-depth review. Dean Baker takes issue with Piketty’s determinism.

Global Inequality: Just how bad is it?

Oxfam’s Deborah Hardoon breaks down the maths of global inequality.

Recent studies found that in America, CEO pay in 2013 was up 9 percent over the previous year and Wall Street bonuses exceeded the earnings of every full-time worker making the federal minimum wage.

Governments in the richest countries and those with emerging economies have chosen to favour growth at the cost of inequality.  Science Magazine focuses on inequality, science, and big data to explore the origins, impact and future of inequality around the world.

I’m not poor. Why should I care?

“Humanity Divided” found that higher levels of inequality were accompanied by slower overall growth.

World Bank economist Branko Milanovic found that it’s more “fun” to live in more equal societies. A study conducted by Sir Michael Marmot found that high levels of inequality harms the health of both rich and poor.

And UNDP’s own research shows that the developing countries in Europe and Central Asia with the lowest rates of income inequality have also had the greatest successes in reducing poverty.

How do we perceive inequality?

A now-classic study by Michael I. Norton and Dan Ariely found that most people preferred Sweden’s much flatter income distribution.

Yale psychologist Paul Bloom wrote about a series of studies that found children have an inherent attraction to what they perceive as fairness.

You may ask yourself, well, how did we get here?

A number of factors helps explain our spiraling levels of income and wealth inequality.

Daron Acemoglu and James A. Robinson, the authors of Why Nations Fail: The Origins of Power, Prosperity, and Poverty, cite vast differences in political power.  Others find public policy, deregulation, or changes in the tax code  as reasons for the widened gap between the haves and the have-nots.

Do we just have to live with it?

Nope. Piketty proposes a global tax on wealth to address the growing divide.

Oxfam International asks: What would change if we focused on inequality rather than poverty?

Jason Sattler rounded up five ways to reduce inequality and Peter Edelman, Mark Greenberg, Steve Holt and Harry Holzer argued that expanding tax credits for the working poor with children would go a long way toward reducing inequality (in America).

Have I missed anything?

Let me know! Join the debate: @UNDPEurasia. You can tweet your questions to us and using the hashtag #TalkInequality


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