Income Equality: 17 Things to Watch

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A number of years ago I discovered a funny term called the GINI index. While it sounds rather technical, it is a fairly simple measurement which assesses the gap between the rich and poor. For example, if your country has a very high GINI score (like Brazil), the wealth of the country is in the hands of very few people (and we repeatedly heard this theme during the recent Summer Olympic broadcasts). In contrast, a nation like Austria has a very low GINI index. This means there is less income disparity between the wealth and the poor.

Beyond being a fascinating statistic, there is an important warning that the GINI index provides – it has proven to be a strong predictor of social and political unrest! When the GINI index is high a country is ripe for violence, rebellion and protests. The opposite is true when there is a low score. Today’s blog provides some great trend insights from Shaping Tomorrow about changes in global economic equality. Here are 15 inequality trends to keep an eye on!

“Growing wealth gaps are the biggest threat to global sustainability today and inequality can be expected to increase. Economic inequality will likely reach unprecedented levels. Here are some issues and potential solutions that we must all work to solve or suffer the potential consequences”.

  1. Total annual economic losses due to gender inequality in the labor market have averaged US$95 billion per year since 2010 in sub-Saharan Africa and could be as high as US$105 billion.
  2. Just because income inequality is rising doesn’t mean that “happiness inequality” will rise in tandem.
  3. The spike in income inequality will create social unrest.
  4. If wage differentials continue along their current trajectory, the UK will have returned to Victorian levels of income inequality by 2030.
  5. Differences in schooling and educational attainment are already the most significant determinants of income inequality in China.
  6. A glut of young workers, poverty, inequality, and urbanization-the most likely future is that informal employment will persist or grow in many or all economies.
  7. A growing share of the workforce could be left behind even as digital technologies increase overall income.
  8. AI will bring challenges in areas like inequality and employment.
  9. The absolute number of people living in extreme poverty in sub-Saharan Africa could increase by over 50 million between 2011 and 2030 to 470 million people.
  10. The spread of robotics and intelligent computers will exacerbate social inequality across the globe.
  11. Simply expanding access to the Internet will not stem the tide of inequality it is creating.
  12. A new McKinsey Global Institute report finds that $12 trillion could be added to global GDP by 2025 by advancing women’s equality.
  13. One may expect a counter-wave of right and left radicalism in the developed world.
  14. A minimum income could help reduce the impact of technological unemployment on further exacerbating inequality.
  15. The rise of digital technologies could possibly be playing a part in creating an extreme elite of the very rich.
  16. The rise of robots could depress wages.
  17. The publication of pay ratios will likely help to reduce pay inequality as a result of the outrage that ratios would produce.

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Jeff Suderman is a futurist, consultant, and professor who works in the field of organizational development. He partners with clients to improve culture, leadership, teamwork, organizational alignment, strategy and organizational future-readiness. He resides in Palm Desert, California. Twitter: @jlsuderman Email: jeff@jeffsuderman.com

Source: Shaping Tomorrow

Photo Source: FreeImages.com/AnatoliStyf

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