Wednesday, March 16, 2011

Growing inequality, between people, between countries, between region, between urban and rural.

In absolute terms, some 900 million live on daily income of below US$1.08 (the World Bank’s lowest poverty threshold) and some 2.1 billion below US$2.15 per day, i.e. almost one third live on “almost nothing”; they earn per year less than I earn per day and what some charge per hour of their work, and yet very few earn per minute. The proportion of poor people shrank from 37 percent to 30 percent 2002; most of the improvement was in China. In Africa south of Sahara 51 percent are poor (World Bank 2007). Seen over a longer term, things are not moving in the right direction, on the contrary. David Landes estimates that today the difference in income per head between the richest nations, such as Switzerland and the poorest, such as Mozambique, is about 400 to 1. Two hundred and fifty years ago, the difference was perhaps 5 to 1 and the difference between Europe and India and China was perhaps less than 2 to 1 (Radkau 2008).

There are also significant differences within countries The Economist writes about growing regional inequality in the UK the difference between GDP per person in the richest region is almost ten times as high as in the poorest (well the definition of region in the UK case is a bit strange compared to the US, in the US they used states, but in the UK they used some substantially smaller units and of course you get more disparity the smaller units you use...). In the USA the difference in income between the District of Columbia and Mississippi is five times, and increasing. Shanghai in China is set to overtake Mississippi in 2015 and people there already earns more than a quarter och the regions of the UK and Italy. And in most countries the gap between rural and urban areas is increasing. See the graph from the World Bank Development report of 2008.

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