Inequality reaches a record high in the US, but which countries are worst off?

Five years after Lehman Brother's collapse, one group has fared spectacularly well: the richest 1 per cent. The world's superpower is now worryingly dependent on the financial fortunes of just 1.35m taxpayers. But where in the world is inequality the grea

It’s now almost five years since Lehman Brothers collapsed, precipitating a global financial crisis. In the US, one group has fared significantly better than the rest as the country struggles out of recession – the richest 1 per cent.

Recent data from the Internal Revenue Service shows that the incomes of the richest 1 per cent of Americans increased by 31 per cent between 2009 and 2012, while the incomes of the bottom 99 per cent grew less than 1 per cent. There’s a good Economist chart to illustrate this here. The share of national income flowing to the richest 1 per cent has now reached a record high of 19.3 per cent.

So how does this compare internationally? The UK has little reason to feel smug. According to a report this February by the Resolution Foundation, the richest 1 per cent of Britons own 10 per cent of national income.

The Organisation for Economic Cooperation and Development (OECD) warned earlier this year that inequality was increasing across its 34 member countries. It has rated its members according to levels of inequality using the Gini coefficient (which measures the extent to which the distribution of income varies from perfect equality.) The UK ranks 28th out of 34 countries, and the US fares even worse at 31. Only Turkey, Mexico and Chile are more unequal than the US. Meanwhile Slovenia, Denmark and Norway are three OECD nations with the most equal income distribution. You can find the full list here.

The Gini coefficient can’t distinguish between different distributions of inequality, in that it doesn’t tell you if inequality is high because the top 1 per cent hold a huge proportion of national wealth, or if the majority of the country’s wealth is held by the top 25 per cent. The Gini coefficient also depends on up-to-date GDP data, which is especially hard to extract from developing countries. This can sometimes make comparison hard.

The CIA world fact book, for instance, compares 136 countries in terms of inequality, but some of the data it uses is over 15 years old. Here the US ranked 95th out of 136 in terms of inequality, with the UK in 76th place, and Sweden, Slovenia and Montenegro topping the list. The most unequal countries were Lesotho, South Africa and Botswana.

One conclusion that can be drawn is that both the UK and the US may be wealthy nations, but compared to their wealthy peers they stand out because of the wide gap between rich and poor. This has all kinds of implications. Rising inequality raises moral questions about fairness and social justice, and some researchers believe that inequality holds back economic growth. There’s also a worry that as the economic power of the richest 1 per cent increases, their political power increases with it.

In the US, for instance, the richest 1 per cent pay 37.4 per cent of income taxes – leaving the world’s superpower worryingly dependent on the financial fortune of just 1.35 million tax payers. Similarly in the UK, 30 per cent of government tax revenue comes from just 308,000 earners in 2012.
 

A homeless man rests along Wall Street in front of the New York Stock Exchange. Photo: Getty

Sophie McBain is a freelance writer based in Cairo. She was previously an assistant editor at the New Statesman.

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Theresa May’s stage-managed election campaign keeps the public at bay

Jeremy Corbyn’s approach may be chaotic, but at least it’s more authentic.

The worst part about running an election campaign for a politician? Having to meet the general public. Those ordinary folk can be a tricky lot, with their lack of regard for being on-message, and their pesky real-life concerns.

But it looks like Theresa May has decided to avoid this inconvenience altogether during this snap general election campaign, as it turns out her visit to Leeds last night was so stage-managed that she barely had to face the public.

Accusations have been whizzing around online that at a campaign event at the Shine building in Leeds, the Prime Minister spoke to a room full of guests invited by the party, rather than local people or people who work in the building’s office space.

The Telegraph’s Chris Hope tweeted a picture of the room in which May was addressing her audience yesterday evening a little before 7pm. He pointed out that, being in Leeds, she was in “Labour territory”:

But a few locals who spied this picture online claimed that the audience did not look like who you’d expect to see congregated at Shine – a grade II-listed Victorian school that has been renovated into a community project housing office space and meeting rooms.

“Ask why she didn’t meet any of the people at the business who work in that beautiful building. Everyone there was an invite-only Tory,” tweeted Rik Kendell, a Leeds-based developer and designer who says he works in the Shine building. “She didn’t arrive until we’d all left for the day. Everyone in the building past 6pm was invite-only . . . They seemed to seek out the most clinical corner for their PR photos. Such a beautiful building to work in.”

Other tweeters also found the snapshot jarring:

Shine’s founders have pointed out that they didn’t host or invite Theresa May – rather the party hired out the space for a private event: “All visitors pay for meeting space in Shine and we do not seek out, bid for, or otherwise host any political parties,” wrote managing director Dawn O'Keefe. The guestlist was not down to Shine, but to the Tory party.

The audience consisted of journalists and around 150 Tory activists, according to the Guardian. This was instead of employees from the 16 offices housed in the building. I have asked the Conservative Party for clarification of who was in the audience and whether it was invite-only and am awaiting its response.

Jeremy Corbyn accused May of “hiding from the public”, and local Labour MP Richard Burgon commented that, “like a medieval monarch, she simply briefly relocated her travelling court of admirers to town and then moved on without so much as a nod to the people she considers to be her lowly subjects”.

But it doesn’t look like the Tories’ painstaking stage-management is a fool-proof plan. Having uniform audiences of the party faithful on the campaign trail seems to be confusing the Prime Minister somewhat. During a visit to a (rather sparsely populated) factory in Clay Cross, Derbyshire, yesterday, she appeared to forget where exactly on the campaign trail she was:

The management of Corbyn’s campaign has also resulted in gaffes – but for opposite reasons. A slightly more chaotic approach has led to him facing the wrong way, with his back to the cameras.

Corbyn’s blunder is born out of his instinct to address the crowd rather than the cameras – May’s problem is the other way round. Both, however, seem far more comfortable talking to the party faithful, even if they are venturing out of safe seat territory.

Anoosh Chakelian is senior writer at the New Statesman.

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