The Editorial Analysis: What rising inequality means

Rising inequality: Relevance

• GS 1: Salient features of Indian Society, Diversity of India.

Rising inequality: Context

• The COVID-19 pandemic has exposed the stark divide between the rich and the poor. Inequality in our country can be seen from the following facts.
• Top 10% of the global population share 52% of the total income, while the bottom half survives with a mere 8.5% of it.
• In terms of wealth, the top 10% of the global population own 76% of the total wealth, while the bottom 50% share a mere 2%.

Inequality around the world

• The top 10% have an income share of 36% in Europe vis-à-vis the top 10% with a share of 58% of the total income in West Asia and North Africa. It means inequality is moderate in Europe and sharp in Africa.
• There is a theory that with increase in national income, inequality increases. This theory, however, does not hold true in many cases.
• For example, high-income countries such as the U.S. have higher levels of inequality as against countries such as Sweden, which have moderate levels of inequality.
• Similar contradictions are also seen when we contrast middle-income nations such as Brazil, India and China as against Malaysia and Uruguay.
• So, it can be said that inequalities around the world are less due to rise in the average income and more due to the poor redistributive policies.

What rising inequalities means

• Wealth concentration and rising inequality is making nations wealthier but government poorer. It is because resources are limited that are gradually moving into private hands.
• The scenario is undoubtedly an outcome of the ineffectiveness of redistribution measures and also a complete absence of measures that discourage accumulation.
• Some additional features of this exposition of inequality also relate to imbalance of women’s share in income.
• It also shows the ecological inequities indicated by the differential carbon emission levels.

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