How far apart are the incomes of the rich and poor in different countries?
October 3, 2024
How far apart are the incomes of the rich and poor in different countries?
Posted by eortizospina
6 comments
Obviously this is interesting data, but politically speaking the issue isn’t people making $200,000 its people making $200,000,000 or even worth $200,000,000,000.
The real interesting data may be in the difference between top 10% cut off line and top 1%… in the US, the top 10% number shown is not rich by most standards.
Good visualization.
There is probably a big difference in the bottom 10% in UK/US and poorer countries beyond just the number. In the US, someone with very low income often has a huge number of benefits that add up to a substantial amount of cash-equivalent each month but don’t count as “income”. I’m guessing the poor person in Brazil does not have nearly the same situation.
There are probably also differences in which people are low income and why. In the US, a lot of low income people are either college students or retired people. In poor countries, people are often “trapped” at low income, and there aren’t so many retired people or college students currently not working (much) but who later will.
China greatly surprises me for the low numbers, although I see that is 2018 data, and six years is a long time at Chinese GDP growth.
(1) Is this individual income or household income? That’s really important. If it’s household, then is there data on the number of one-income households and two-income households in each country?
(2) This says “After-tax..” Does that also include, for example, the benefit of the Earned Income Tax Credit in the US or other payments or benefits to people at the low end? If, for example, a household just inside the bottom 10% received $700 a month in food benefits, is that part of the Orange number?
(3) When this discussed the “richest 10%” — is that the “top 10% of income earners” or is it measured by wealth? In the US, for example, the top 10% of households have a net worth of just under $2M. But, many of those people are recent retirees (that $2M is literally their retirement savings), so don’t have a ton of income.
We’ve really become more unequal because of federal policies. Had the more equitable income distributions of the three decades following World War II (1945 through 1974) merely held steady, the aggregate annual income of Americans earning below the 90th percentile would have been $2.5 trillion higher in the year 2018 alone. That is an amount enough to more than double median income—enough to pay every single working American in the bottom nine deciles an additional $1,144 a month. Every month. Every single year.
Inequality had grown to over $47 trillion from 1975 through 2018. At a recent pace of about $2.5 trillion a year, that number we estimate crossed the $50 trillion mark by early 2020. That’s $50 trillion that would have gone into the paychecks of working Americans had inequality held constant—$50 trillion that would have built a far larger and more prosperous economy—$50 trillion that would have enabled the vast majority of Americans to enter this pandemic far more healthy, resilient, and financially secure.
6 comments
Obviously this is interesting data, but politically speaking the issue isn’t people making $200,000 its people making $200,000,000 or even worth $200,000,000,000.
The real interesting data may be in the difference between top 10% cut off line and top 1%… in the US, the top 10% number shown is not rich by most standards.
Good visualization.
There is probably a big difference in the bottom 10% in UK/US and poorer countries beyond just the number. In the US, someone with very low income often has a huge number of benefits that add up to a substantial amount of cash-equivalent each month but don’t count as “income”. I’m guessing the poor person in Brazil does not have nearly the same situation.
There are probably also differences in which people are low income and why. In the US, a lot of low income people are either college students or retired people. In poor countries, people are often “trapped” at low income, and there aren’t so many retired people or college students currently not working (much) but who later will.
China greatly surprises me for the low numbers, although I see that is 2018 data, and six years is a long time at Chinese GDP growth.
Here’s an [interactive chart](https://ourworldindata.org/explorers/incomes-across-distribution-lis?tab=chart&Indicator=Decile+thresholds&Decile=9+%28richest%29&Income+measure=After+tax&Period=Month&Adjust+for+cost+sharing+within+households+%28equivalized+income%29=true&country=CHL~BRA~ZAF~USA~FRA~CHN) based on this data where you can compare any income decile across countries and over time
(1) Is this individual income or household income? That’s really important. If it’s household, then is there data on the number of one-income households and two-income households in each country?
(2) This says “After-tax..” Does that also include, for example, the benefit of the Earned Income Tax Credit in the US or other payments or benefits to people at the low end? If, for example, a household just inside the bottom 10% received $700 a month in food benefits, is that part of the Orange number?
(3) When this discussed the “richest 10%” — is that the “top 10% of income earners” or is it measured by wealth? In the US, for example, the top 10% of households have a net worth of just under $2M. But, many of those people are recent retirees (that $2M is literally their retirement savings), so don’t have a ton of income.
We’ve really become more unequal because of federal policies. Had the more equitable income distributions of the three decades following World War II (1945 through 1974) merely held steady, the aggregate annual income of Americans earning below the 90th percentile would have been $2.5 trillion higher in the year 2018 alone. That is an amount enough to more than double median income—enough to pay every single working American in the bottom nine deciles an additional $1,144 a month. Every month. Every single year.
Inequality had grown to over $47 trillion from 1975 through 2018. At a recent pace of about $2.5 trillion a year, that number we estimate crossed the $50 trillion mark by early 2020. That’s $50 trillion that would have gone into the paychecks of working Americans had inequality held constant—$50 trillion that would have built a far larger and more prosperous economy—$50 trillion that would have enabled the vast majority of Americans to enter this pandemic far more healthy, resilient, and financially secure.