Wealth inequality has been rising globally over the last four decades — in 2019, the US saw the highest economic inequality in 50 years, with the top 20% households making more than half of the entire US income. By 2016, the top five percent earners had over 248 times as much wealth as the poorest families. The Covid-19 pandemic has highlighted such inequality. The world’s richest people — billionaires, CEOs and top technology executives — have seen their fortunes grow by 27% to over ten trillion dollars in 2020. At the same time, 22.2 million jobs were lost in the US alone. Over 121 million Indians lost their jobs during the Covid-19 lockdown. Meanwhile, the wealth of Indian billionaires increased by 35% to $423 billion. Economists estimate that while the 1,000 richest people on Earth could recoup their Covid-19 losses in nine months, inequality will cause poorer groups to take over a decade, simply to return to their pre-pandemic levels.
The implications of such inequality are profound. Inequality is both caused by, and deepens, uneven access to education, nutrition, healthcare, technology, housing and social equity — women accounted for 100% of the 1,40,000 jobs lost in the US in December. These losses mean even more restricted economic opportunities, and even less interpersonal dignity. Inequality also depresses entire economies — a huge gap between the rich and poor means more people have less purchasing power, impacting GDP. Africa, which struggles with endemic poverty, is also one of the world’s most unequal regions, the top ten percent of its rich holding half of national income. However, multiple mitigating steps are possible.
ET Evoke’s global experts highlight strategies from government safety nets to equitable corporate norms and companies’ enhanced sensitivity. It is in our collective interest that we respond to inequality, for economies are ultimately based on hope. It is the hope of doing better that fires up aspirations, empowers effort, creates innovations and strengthens dignity. A devastatingly wide gap between the rich and poor means a loss of such hope — and, without hope, everyone is poorer.
( Originally published on Jan 28, 2021 )