Global economic inequality: what matters most is where you are
ourworldindata.org
ourworldindata.org
1) Write an article about income inequality. Wealth inequality is 100x worse than income inequality - http://metrocosm.com/wealth-vs-income-inequality/ but if you just smoothly transition from talking about economic inequality to income inequality, not only is it not as bad, the reader becomes a much bigger part of it and hence you become less of a part of it.
2) Ignore PPP entirely. If a Slovakian gets paid 5x less than you do in New York and also has 5x cheaper haircuts, you should probably feel a bit guilty about that.
3) Focus on personal responsibility. This is an effective technique. It was used to turn jaywalking into a crime in the early 20th century. It was used to make the litter epidemic of the mid 20th century Not McDonalds Or Coke's Fault. It was used to shift responsibility from Oil supermajor CEOs on to suburban white middle class soccer moms and voila - reduced pressure.
Just remember, as the article says: "If you want to reduce global inequality and support poorer people, you do have this opportunity. You can donate some of your money."
”More than 20 years ago, the Cystic Fibrosis Foundation took the pioneering step of providing research funding to Aurora Biosciences (now Vertex Pharmaceuticals, Inc.) to identify and develop the first treatments for the underlying cause of CF. Driven by the relentless determination of the CF community, those investments led to the development of multiple transformative therapies to treat CF.”
I partially excused that mentally with a "but yeah, research is expensive", but now learning that it was paid for by donations ruins that argument.
The fact that the state don't want to pay for it is of course also debatable..
And the CF Foundation has (had) an ownership stake in the IP for the drug and sold it for $3.5B.
And guess what that money is going towards? More research and help for CF patients! They gave $575M to Vertex for next generation CF drugs.
https://endpts.com/royalty-pharma-tops-its-record-setting-3-...
The foundation getting a cut of the success and reinvesting in new opportunities sounds good though, thanks for pointing that out!
Other charities, like those that are setup to cure specific illnesses, can accomplish their mission on reasonable timeframes.
If not, then one of two things are true:
1) Money can't solve social ills
2) Not enough people who have the means to do so are willing to voluntarily sacrifice to solve a social ill
Either way, that suggests that taxation/wealth redistribution solutions is similarly doomed (unless you're willing to do it by force).
I haven't gotten to the article yet, but I'm pretty sure this is intended as a criticism or the article.
Looking at the article, it uses the term "international dollars" instead of "PPP adjusted dollars," so I think the original comment just missed that the dollars are actually adjusted.
It makes sense if you read the original comment as a criticism of the article ("whitewash the staggering amount of wealth and power is held by American oligarchs" is, I think, pretty clearly a bad thing to do) which just missed that the dollars in the article were adjusted.
I took it as minimizing the disparity between rich and poor countries.
I don't know how to reconcile your interpretation with the idea that someone should feel guilty for having a higher dollar income but the same PPP income as someone else.
That's not really discussed because it's an utterly standard thing to do in cross-country comparisons, but the article might have been better if it talked about the fact the data is PPP adjusted so the actual dollar amounts earned in the poorer countries are even lower, and the fact that PPP adjustments aren't perfect so people on $6.70 of imputed US purchasing power can still pay rent
This is the point I am pushing back on.
$6.70 a day is 3 and a half times what is considered extreme poverty. I guess the site is focusing on the negative side here, maybe in order to get more donations, and that's fine, but the world wide reduction in extreme poverty in recent decades is worth commenting on. From the NY Times:
"In 1990, about 36 percent of the global population — and nearly half of people in developing countries — lived on less than $1.25 a day, the World Bank’s definition of extreme poverty at the time. (It’s now $1.90 a day.) In 2000, United Nations member states pledged to cut extreme poverty worldwide — specifically to halve the proportion of people living in extreme poverty, from 1990 levels, by 2015.
Bottom line: The U.N. goal was met. By 2015, the share of the world’s population living in extreme poverty fell to 12 percent from 36 percent in 1990, a steep decline in just two and a half decades. During a single generation, more than a billion people around the world climbed out of extreme poverty, surpassing the goal."
The question then is, do you think $6.70 a day (US ppp equiv) is actually quite a decent income, or do you think the extreme poverty threshold might be a pretty low bar to have set?
(FWIW I think the UN's targets were more closely tied to the need to be low enough to stand a chance of being hit - which is fine - than Max's editorial is linked to what the donors to his data website may or may not already think about poverty.
Well first of all, the point I was making was that enormous progress has been made, and the article has a very negative tone in spite of that. I'm just too old for that type of pessimism. Things do get better.
And as far as the bar goes, I don't know that there is a bar. There's a quote by a labor union leader named Samuel Gompers from over a century ago, "We do want more, and when it becomes more we shall still want more". I think that about covers it.
The only argument is over how we get there.
I realize this is a huge tangent, but why do you feel this way? Between wealth disparity (admittedly what we're arguing here so obviously it's debatable), global warming, dwindling finite resources, unsustainable debts (I am aware of MMT) - I feel quite the opposite. It feels like we're robbing the future to benefit the now.
I realize we could easily go back and forth with lists of "this is why things are worse" and "this is why things are better" but my question is why do you think, as a whole, things are improving?
I was born in 1970. I know how I grew up. I know what my parents living standard was and I know what my grandparents living standard was. I have my admittedly failing memory, but I still remember.
If you want to believe things aren't improving, I'm not going to stand in your way. It's your world now. You own it. But god damn, there are reasons I would go back and live in 1976 again, but living standard isn't one of them.
So probably no.
It’s easy in any era to list out 9 or 10 things that everybody is worried about. It would be pretty weird if you couldn’t think of 9 or 10 things to be worried about today. The question is whether things are better or worse on balance. And by that accounting I think there are lots of reasons to be optimistic.
Such as? Nuclear arsenals are still a thing and more countries have them now. Inflation is ramping up right now and many people say the economy is on the verge of being utterly fucked. Apart from that it seems like you're generalizing life from a small town specific to your family. I can cherry pick anecdotes from my own life to paint a picture either way too, it doesn't really tell us anything substantial.
Those two fixes most issues humanity have struggled with throughout history. Of course you can add so much more quality of life things on top of that, but at least then people don't starve or get diseases from sleeping in poor places or being malnourished. That is a poor life, but not necessarily a bad life, if you can eat and sleep well then you can live a good life.
Of course in the western world a hut isn't considered proper housing so you can't rent that out, instead people have to pay for expensive housing or become homeless. Same with food etc. That increases the quality of life, sure, but is also the reason you can't live on a few dollars per day here.
And my original point wasn't to say that the threshold was necessarily wrong so much as to contest the idea that there was something unusual about describing people above that very low standard as "very poor". Now, sure, the same PPP-adjustment imperfections creep in and some people on $6 a day actually live recognisably lower middle class lifestyles (albeit without any foreign travel or car) but the whole point of the comparison is lots of the stuff fast food workers in the West can afford - at least if not being hammered by student debts or SF rent - is out of reach for nearly half the world.
Many of the poorest countries today have life expectancy as USA in the 1960's, and every country in the world today have much higher life expectancy than USA in 1900. That isn't perfect, but they aren't dying in droves.
I think most in the west really underestimate how far you can get on very little.
Edit: I think that western labour puts the poverty line way too high. They put it so high that you basically need a population to work full time to maintain it, or rely on other countries poorer population to work even harder and not get paid for it to maintain it. I very much prefer to have a slightly lower standard and work way less than what modern western labour says we should.
Of course it ought to be higher than hut and food, but I'm not sure why it can't be on the same level as modern China for example. Poor people in China get educated, live long etc.
Sure. That's aligned with my point, since [i] modern medicine exists, although the benefits of not dying from preventable disease are unevenly distributed [ii] I wouldn't consider the average US citizen in 1900 to be anything other than very poor relative to modern living standards.
I've spent time in the developing world so I'm well aware you can get a long way with a lot less than developed world minimum wages. I'm also aware that, say, $2.50 PPP (typically about $0.50 in actual local currency) doesn't buy you much of a life even there. And yes, I've also chosen to work less than modern western labour says we should for large parts of my life. But again, if that was taken into account then most of the people in the bottom half of the global income distribution would be worse off, since they're the ones that don't have favourable labour laws, state pensions or the disposable income to take career breaks. I'd agree people on typical Chinese income aren't doing too badly in having material needs met, but the working hours and conditions many have to tolerate [for now] shifts a lot of them back towards "poor"
I know that many people in my home place earn less than 10USD a day and are able to support their families. This is largely because they own land and despite the roughest of times are able to have shelter and food.
So it's not extreme poverty.
One thing that complicates this is the value of services provided 'for free' by a person's government. The average citizen of the USA lives on $75 per day, but might use another $10 per day of interstate highways paid for by the government - something the citizen of Burundi doesn't get.
Likewise, the Danish citizen lives on $50 a day, but may be receiving a free college education and healthcare while the US citizen spends a substantial fraction of their income on those two.
If you're interested, here is a succinct write-up of the phenomenon https://mattbruenig.com/2021/12/08/how-to-compare-incomes-ac...
Disposable income data is harder to collect, and is therefore less common. This article uses average income (GDP per capita), which compares pre-tax money. The $10/day value that a US citizen gains from the roads was paid for out of that average income.
https://databank.worldbank.org/reports.aspx?source=2&series=...
The rate of growth is indeed faster in developing countries than developed countries. This is to be expected given that they recently started at a lower level of development.
In rich countries, however, inequality has trended up, while in many developing countries it has trended downwards. But even that is a mixed bag.
In the largest developing economies (China and India), inequality is increasing, so the rich are getting richer there faster than the poor are getting richer. Of course, the jump for many people from utter poverty to having even the basics is a massive one.
It gets more complicated though. In Latin America, inequality is generally decreasing despite relatively high growth.
In the developed world, inequality has grown as those with investments and/or skills tied to global growth have seen their wealth rise, while people lacking either of those have seen wealth decline. This phenomenon and the disinvestment in public infrastructure that has accompanied it, has been credited with the recent populist swing in politics in the developed world.
Adjusted for price level, excluding the top 1%, and focusing on the 90-99% percentile: income in the UK is $117k. That's less than in Chile ($130k), Turkey ($149k), and comparable to Mexico ($99k) or South Africa ($82k). Meanwhile, the bottom 50% in the UK earn 3-10x of what their peers in the aforementioned countries do. And UK is hardly a paragon of equality to begin with
Another sobering fact from the linked report - of the countries where the 90-99th percentile earns surprisingly good bucks - all have a large impoverished underclass: Israel, Chile, South Africa, Mexico, USA, Korea, Russia, Brazil
From what I've read, most economists say that allowing more immigration between countries would improve both the lives of the people who move, and those of the destination country. I think it is worse for the country that they leave, but on net increased immigration would significantly increase global economic conditions
Offshoring basically transferred some of the wealth from the bottom middle-class/lower-class to the developing/poor world. The arbitrage value went to some lucky dudes who knew how to play these international games.
But these days are over. And it's hitting poor countries hard and making illegal immigration a more apparent problem.
They can still be materially a lot richer and often enjoy many other lifestyle benefits from moving overseas even if they have to drop down the status ladder and forget about owning land and having servants, but it does make the decision a bit more of a tradeoff than a salary comparison might suggest. The option of moving isn't really there for the people who are so poor there's no upside to staying in their own country.
Its a huge step, too big for way too many people, but definitely worth it for many others. It looks much worse from far than actually doing the steps though, you break them down into atomic parts just like any other problem solving.
I've done it twice and when looking back to those 10/15 years, it was the right choice, probably the best in my life. But its best done before starting family.
[0] Tangentially, it is an interesting question how long the ethnic European neighborhoods, nostalgically portrayed in movies like "The Godfather", that began to dissolve around WWII could have lasted. According to one view of what is commonly called "white flight", a major factor was the WASP ruling class' social engineering and ethnic cleansing of them out of existence by dispersing them across the suburbs which hastened their assimilation ("into what?" is itself a question worth pursuing; a WASP-constructed "identity"?). The reason this migration out of the cities coincided with the civil rights movement, according to this view, is that the Great Migration of black sharecroppers from the South was effectively an instrument of mass migration into ethnic neighborhoods. Mass migration always fragments the peoples into which the migration flows. So, given this interpretation, this was not some manifestation of racism, but of disintegrating neighborhoods (the "white guys" throwing rocks in Marquette Park were apparently Lithuanians who felt that their community was threatened by this migration). Many of these neighborhoods were also Catholic, and with falling birth rates among Protestants following the 1930 Lambeth Conference, the idea of Catholics outbreeding them was not something they cared to endure.
That's a lot of people. There's so many variables when it comes to migration that an individual has to face, a percentage that high is actually quite significant. Rising quality of life also means immigration pressure isn't as high.
I dunno about that, as a professional developer in the UK it's way easier to immigrate to Canada or Australia than the US.
So you end up with "senior engineers" in Canada/Australia driving taxis and not ever being able to land a job as engineers, even though they got enough points to immigrate by being one, at least on paper.
In the US, someone has to be able to get a job above market rates (so convince an employer and the government that his skills are required) before even being considered for immigration. So I wouldn't say it's harder, at least for someone really qualified.
Well, they both give major points if you've got a job offer so I wouldn't say that. But right now (COVID aside) I could apply to Australia, get my visa and be living in Melbourne inside 6 months, then citizenship in about 4 years. For the US, I'd have to:
- Get a job with a US company here
- Work there for a year and hope they're willing to transfer me on an L1 visa
- Hope the US Immigration RNG comes up with my name
- After working for a while, transfer onto an employment-based visa while hoping I get sponsored for that too.
Am I talking about illegal immigrants or Uber?
While in theory one can move to Canada legally, it appears to me that becoming a permanent resident would be difficult or impossible for most people in the world.
There is a complicated points system that possibly a lot of HN readers could qualify for, but not most people.
They do not want you if you aren't a member of the managerial class, professional, or skilled tradesperson.
They also do not want you if you aren't between 18 and 35. It's not completely impossible but if you are closer to 50, there is a substantial penalty to your score.
They do not want you if you have any health or mental condition that they determine will put a burden on the public system.
They do not want you if you aren't fluent in English or French.
They do not want you if you aren't highly educated.
They do not want you if you don't have a guarantee of employment in Canada for a sufficient amount of time or a lot of money. Having a job in Canada isn't necessarily enough.
They do not want you if you have a criminal record, especially any form of DWI, whether alcohol, pot, or something else.
Marrying a Canadian is not an automatic pass.
There are also a bunch of specialized programs with different criteria, such as for refugees, people working as caregivers, etc.
* economic status and stability: training at budgeting, job hunting, overcoming addictions -- some of the classes have been shared in joint programs with the NAACP in the US)
* aids for refugees, families, volunteering, food aid, service projects, etc (worldwide)
* higher-educational opportunities for almost anyone globally with internet access, including groups who are traditionally excluded due to tuition cost or academic experience, knowledge of English, etc, and teachings that really help with family stability, peace/hope, and generall going forward in life.
* being a personal mentor and being mentored
* etc. It goes on and on.
> To achieve a more equal world without poverty the world needs very large economic growth.
I don't understand how this follows. Our global economic system is structured to concentrate wealth, so there is no guarantee that growth benefits the poorest.
> I don't understand how this follows. Our global economic system is structured to concentrate wealth, so there is no guarantee that growth benefits the poorest.
The post says growth is necessary; you point out that it is not sufficient. Both can be true.
“Please imagine a ladder, with steps numbered from 0 at the bottom to 10 at the top. The top of the ladder represents the best possible life for you and the bottom of the ladder represents the worst possible life for you. On which step of the ladder would you say you personally feel you stand at this time?”
Most of the happiness data seems ended around 2014-2016.