American University of Science and
Department of Humanities and Social
Introduction to Philosophy
Global Inequality in income
Name: Serouj Serop
Semester: Fall 2017/2018
Global Income Inequality
Tracking the Global inequality both in income and wealth was
a really challenge to me but the results are shocking.
This Project shows us the evolution of global income
inequality over the past years. Global income inequality—the total of
inequality within and between nations—is massive today, the birth of uneven
growth in the world’s regions since the beginning of the Industrial Revolution.
The Economy of the West was booming while Middle east and Africa were busy
fighting their wars over most of the period, which led to the dramatical grow
of the Global inequality. The economical growth remained uneven, now most of
the wealth world wide lies between few Nations and with a very few percentage
of the population.
Today around 2.7 Billion people live without proper access to
a good public health, and more than 800 million are undernourished according to
UNDP. The average life expectancy between a low-income and high-income country
is around 19 years which is a very serious issue to be addressed. More than 70% of the worlds adults own under
10,000$ in wealth while less than 1% of the worlds population owns almost 50%
of the worlds total wealth. The other 40% is distributed among 8% of the worlds
population. The graph below illustrates the Global wealth shares by population percantage.
Western and European countries host the majority share of the
world’s millionaires. More than 70 percent of the world’s millionaires are in
Europe or North America, with 43 percent of this millionaires are from United
States. The only nonWestern nations with a significant share are Japan, China,
I would like to talk about some of the causes that leads to
inequality, common factors to impact inequality include:
Labor Market outcomes.
Providing more opportunities for wealthy people to
Increase international and decrease domestic
Extra-legal property ownership of real estate and
The CEO’s very highly paid salaries is growing in
acceptance; while, skilled workers are being paid low wages.
suppressing wages in low-skill jobs due to a surplus
of low-skill labor in developing countries
Neoclassical economics views the rising of inequality due to
arising in value by labor, capital and land. The labor wages inequality in
income distribution is due to different classification of labors. In a market
economy, inequality is caused because of the productivity gap between
highly-paid professions and skilled workers.
Sometimes the wages equilibrium is lower than the minimum
wages that leads to labors are being paid and many which want to work for a
lower wage are not being hired which leads:
Unemployment rate to rise.
Uneducated or freshly educated labors won’t find a job
due to high minimum wages.
Skilled labors will find it very difficult to find a
job due to the standards of wages.
A major cause of inequality is the rate of the income Taxed
with the progressivity of the tax system. Almost every third world countries
wont relay on tax revenues form progressive taxation but rather relay on value
added tax- The tax that is from consumable goods. For example in Lebanon the
Value added tax is 11% which is a very high rate in relation to Europe or USA,
the average tax world wide is 7%. The Lebanese tax system on income is
progressive and will reach to a maximum of 21%; while, the corporate tax is a
flat tax of 17%. Comparing to Lebanon USA’s progressive tax on wages is up to
55%, and the corporate tax is progressive as well to a maximum of 35%.
Education plays a very high role is creating inequality of
diminishing the inequality among the population. The access of individuals to
education varies some are getting very good education while others are being
ignored regardless of their hard working or brilliant mind. The demand for
education by population is very high but due to increasing in private schools
are universities is leading to inequality because of their high tuitions to enroll
in certain teaching institutions.
Those who can not afford to go to private sector are going to
public sectors to pursue their education, and the rising demand of companies
for good education is leading to increase in Inequality.
A very recent study conducted by Oxfam’s shows that the
richest 1% now have more wealth than the rest of the world as combined
population. The Global inequality that we fear is worse than we imagined. We
know this much but what we don’t know is that those rich 1% hide so much of
their wealth In Tax Havens-A tax haven is a country that offers foreign
individuals and businesses a minimal tax liability in a politically and
economically stable environment, with little or no financial information shared
with foreign tax authorities. It is impossible to know how much wealth they
have. Recent estimation is made that up to 32Tn$ is hidden in tax havens which
is around 1/6 of the world’s total private wealth. If we add this to their
already wealth it would look much worse than we know.
Over the past few decades inequality has been so bad that, in
2000, Americans were 9 times richer than Latin Americans, seventy-two times
richer than subSaharan Africans, and a mind-popping eighty times richer than
south Asians. These numbers give us a sense for how unfairly the global economy
distributes our planet’s wealth.
FACTS of who to blame:
“The U.S. minimum wage remained at $5.15 an hour until
2007. Ten years later, it’s only risen to $7 an hour. (Source: The Big Squeeze,
Steven Greenhouse, pp. 12-14.)”
in the country illegally, fill more low-paid service positions. They
have less bargaining power to demand higher wages.”
“Wal-Mart is the nation’s
largest employer, at 1.4 million. Unfortunately, it has set new standards in
reducing employee pay and benefits. Its competitors must follow suit to provide
the same Low Prices.”
increases inequality. It has also replaced many workers at factory jobs Those
who have training in technology can get higher paid jobs”.
“Recent government tax
policies have helped investors more than low wage earners. Deregulation means
less stringent investigations into labor disputes”.
“The United States must accept that a global wealth
redistribution is occurring. Those in the top fifth of the U.S. income bracket
must realize that those in the bottom two-fifths cannot bear the brunt forever.
The government should provide the bottom two-fifths access to education and
employment training. It can raise taxes on the top fifth to pay for it. It
should make these changes now so that the transition is gradual and healthy for
the economy overall”.