Wealth and income inequality has inspired discussion and sparked debate among economists for years. As these gaps widen in many global economies, the question of whether income and wealth inequality slow growth, and whether the gaps should be closed through policy, becomes more pointed.
Branko Milanovic, a professor at The Graduate Center at the City University of New York and the former lead researcher on inequality for the World Bank, joined Lizzie O’Leary to discuss income and wealth inequality globally.
Milanovic measures inequality worldwide through anonymous surveys, creating a global picture of what wealth and income gaps look like. Each country is assigned a score that ranks inequality in both income and wealth.
Wealth gaps, which measure accumulated wealth through investments and savings, are almost always larger and more significant than income gaps. Even the poorest citizens in the poorest nations are unlikely to be entirely without income, but are frequently without wealth.
So how should we address inequality?
Milanovic says that the consequences for these gaps are complicated, because there’s no world government to regulate income and wealth distribution worldwide.
Within nations, modifications to social structures and policy can correct for systemic inequalities. Milanovic cites education, voting rights, and race and gender discrimination as touchstones that individual countries can address to quell income and wage gaps.
Globally, things are trickier. Migration is a key factor in global inequality, and is a major obstacle to overcome in places where border relationships are tense.
Milanovic says that future global income and wealth inequality is also dependent upon growth in China and India — two places where large income and wealth gaps haven’t slowed economic expansion.
Tune in to the segment using the player above to hear more of Branko Milanovic’s thoughts on wealth and income gaps in the global economy, and to hear the story of two people living and working in China who are experiencing the gaps there firsthand.