Regional Income And Wealth Inequality 2022

Higher unemployment rates, gender disparity, income and wealth inequality: these are some of the side effects of the coronavirus pandemic. While a number of vaccines against Covid-19 was developed and distributed faster than any other major vaccine in history, it might take decades to undo the social and economic damage caused by the virus. The crisis has exacerbated inequalities across all major fault lines in society and undone hard-won gains in poverty reduction around the globe.

Inequality is the gift the keeps on taking. While wealthy nations have been able to secure enough shots to inoculate their populations several times over and roll out Covid-19 boosters at a fast clip, by the start of 2022—according to Our World In Data— only 8.5% of people in low-income countries had received at least one dose of the vaccine. In rich nations, conversely, the share of people fully vaccinated was 70%, and that of partially vaccinated individuals was 6.1%. The Covid-19 vaccine, it should also be noted, is one the most expensive ever sold: World Health Organization (WHO) data shows that governments of lower-income countries pay a median price of $6.88 per dose, whereas before the pandemic the average cost for non-Covid jabs was priced at only $0.80. The overall result is that the wealthiest countries not only have been able to save more lives and help their economies recover faster, but have donated less than 20% of the doses they had promised to low-income nations via the Vaccines Global Access Facility established by the World Health Organization.

But it is not just Covid. If no currency is more precious than time, it has been widely demonstrated that in countries with higher levels of inequality people live less. Yet, one should not make the mistake to conflate poverty and inequality. The United States is very rich, but it is also one of the most unequal, to the extent that its population lives almost half a decade less than people in many other rich nations. According to a study published by The BMJ (formerly the British Medical Journal), between 2018 and 2020, life expectancy in the US declined by almost two years—8.5 times the average decrease in 16 other high income, but more equitable, countries—widening the gap to 4.69 years. The dip, it must be noted, was steeper among Hispanic and Black Americans, and with the long-term effects on the health of coronavirus survivors still largely unknown, it is worrisome to think what the data on life expectancy will tell us years from now.

What we know today is that the economic gaps among the population have only increased. While higher-paid workers have been able to continue working from home, many frontline lower-paid employees—with a disproportionately higher proportion of women affected—have been furloughed or laid off when their businesses closed their doors or educed operations.

Almost two years after the onset of the pandemic, something at first glance different is happening: in what has been dubbed The Great Resignation, an all-time high number of people, especially among low-wage workers, quit their jobs. Economists usually consider it a sign that the job market is healthy and offers new opportunities and better incomes. But this is only partially true: people also quit their jobs due to the lack of adequate childcare, because of burnout, for personal health issues or of their family members. Furthermore, a low-paid worker who finds a job that pays one or two extra dollars an hour remains a low-paid worker: according to the Census Bureau’s Household Pulse Survey nearly 20 million adults, 9% of all adults in the United States, have recently reported that their household sometimes or often did not have enough to eat in the previous seven days. All the while, the Institute for Policy Studies says, the total wealth of American billionaires grew to over $5 trillion since the beginning of the pandemic, over a $2 trillion gain.

While it is impossible to assess the severity of the diverse problems triggered by the  pandemic while they are still unraveling before our eyes, it is evident that the global health crisis has only compounded pre-existing challenges. In December, the World Inequality Lab—a research center based at the Paris School of Economics—released the 2022 World Inequality Report (WIR), which presents analyses generated by more than 100 researchers from all continents over the course of the past four years.

With the top 10% of the population capturing respectively roughly 58% of the average national income, the Middle East and Northern Africa (i.e. MENA) is the most unequal region in the world, followed by  Sub-Saharan Africa at 56%, and Latin America and South & South East Asia at 55%. In Russia and Central Asia, the top 10% seized a share equals to 47%; the U.S. and East Asia are not far off, respectively at 46% and 43%. In all of these cases, the top 10% takes a portion of national income that is more than twice the quota of the bottom 50%. Europe remains the most equal of all regions, with the top 10% receiving 36% of the national income—a result, the report explains, of public investments in education and health financed through redistribution mechanisms in the tax system.

The world map of inequalities, in other words, confirms that national average income levels are poor predictors of inequality. That is true in the case of high-income countries, but also among low and middle-income countries, with some exhibiting extreme inequality (for example Brazil or India and, to a lesser degree, China), and some showing moderate to relatively low levels of economic disparity (Malaysia, Uruguay).

The reports also presents some striking data about not just the average income (as in the money earned on regular basis for providing work or service) but also about the wealth accumulated over time by the richest 10% individuals of the world—their shares range from 59% in Europe to 77% in Latin America and in the MENA region, where the bottom 50% only owns 1% of the total assets.

While the report provides a sobering picture of the state of the world during the pandemic, it also shows that global inequality is not a fatality, and that countries with strong investments in public services and welfare policies have the lowest inequality levels: “The policy solutions often exist, and when they don’t, we often know how to find them,” the researchers at the Lab point out. Tackling inequality, ultimately, is only a matter of political choice—making the right ones has never been as important as it is today.

Source: 2022 World Inequality Report.

Source: 2022 World Inequality Report.