January 5, 2018 — Inequality has been on the rise within the United States and other advanced countries since the 1980s and especially since the turn of the century. The possibility that trade is responsible for the widening gap between the rich and the rest of the population has of course become a major political preoccupation.
This long-standing debate can be illuminated by the latest international statistics on income distribution brought to us by the World Inequality Report 2018,
Inequality has received a lot of attention lately, particularly in two arenas where it had not previously received as much: American public debate and the International Monetary Fund. A major driver is the observation in the United States that income inequality has now returned to the extreme levels of the Gilded Age. (The share of income held by the top 1% rose from 8% in 1980 to 19% in 2012, a level last seen in 1928, and probably the highest among advanced countries. The share held by the top 0.1% rose from 2% to almost 9% currently, a level least seen in 1916. And mobility remains as low as ever.) Inequality remains high in Latin America and has increased in many other parts of the world as well.