What a Super Economy Means for the World’s Poor

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TACOMA, Washington — While countries like the U.S., China and India have some of the largest economies in the world, global inequality and poverty continue to persist. At first glance making more money as a country is considered a good thing. With more money invested into infrastructure, domestic poverty is more likely to mitigate with more resources to go around, and an increase in funds also means an increase in foreign aid. However, although nations are making more money, studies show that the world’s poor are not getting any less poor, with a record of more than 70% of the global population living in a country with a growing wealth gap.

The Growing Wealth Gap

The world’s wealthiest 1% have more than double the money of 6.9 billion people globally, leaving almost half of the world’s population to live on less than $5.50 a day.

Currently, more than 2,000 billionaires are wealthier than 60% of the population, or 4.6 billion people, while about 735 million people are left struggling in extreme poverty. In 2013, the World Economic Forum condemned the increasing unbalance of wealth distribution as a major threat to social stability, and just a year later, the World Bank added “shared prosperity” to its goal of ending global poverty.

For China, the national wealth-to-income ratio has increased from 350% in 1978 to 700% in 2015—the period it took for China to advance in the world from an impoverished, developing country to an economic titan on the global stage. This rise is largely attributed to growth within the private wealth sector, which jumped from 115% to 487% of the national income in the same span of time.

Following the global market crash almost a decade ago, China triaged its hemorrhaging economy with successful stimuli and the value of private assets rising, which in turn encouraged those who could to invest further in their acquisitions, which continued to rocket private wealth in the country.

In India, the wealthiest 10% control 77% of the nation’s wealth. The wealthiest 1% received 73% of the revenue generated in 2017, leaving the 67 million poorest of the population to observe a mere 1% increase in their “wealth.” India’s elite have managed to cut a huge corner of the country’s wealth for themselves through the deals struck between business owners and government officials, as well as through the large inheritances passed down and kept within families.

It’s a Wealthy Man’s World

While women in poverty continue to be one of the most vulnerable populations, it’s no coincidence that among the world’s wealthiest, nine out of 10 billionaires happen to be men. Besides just being on the losing end of the gender wage gap, women have also historically taken lower-paying jobs at a higher rate than men and shoulder a much larger portion of the unpaid work in the world.

In China, after 30 years of housing reform, housing assets continue to be a sizeable source of wealth to the population, yet remain severely unequal in their distribution, especially when looked at through the scope of gender. Part of this is due to how many of the higher-paying jobs belong to men, and as such, they can afford to finance more of their properties but another reason is largely attributed to men being the recipients of intergenerational transfers more often than women.

Only 37.9% of women in China own housing property—a small proportion that includes women who co-owns the property with their husbands. In comparison, 67.1% of men own housing property and among women who co-own with their husbands, only 13.2% of women hold the title in their own name.

In India, there lurks not only a wealth disparity but a power gender disparity. As of 1993, India amended its constitution to reserve a third of randomly selected village counsel positions for women. While a commendable attempt at trying to balance the gender disparity in authoritative positions in India, the need for such a mandate confirms the global trend of more men being in positions of power than women, and in India, this means having more control of money than their female counterparts.

On the matter of inheritance, things remained disproportionately against women until the 1956 Hindu Succession Act. However, the struggle for women to inherit from their late fathers continued up until 2005, as only unwed daughters could inherit.

Fight Inequality: Building Connections to End Inequalities

Fight Inequality is making strides toward creating a more equitable and balanced world. The organization is mitigating inequality by banding together international NGOs, human rights activists, environmental groups, religious organizations and trade unions.

Powered by the alliance and connections forged in this group and their combined funding plan, Fight Inequality likes to focus on action-oriented results that will stay in the minds of those who see, participate and hopefully inspire them to mobilize as well.

Humanitarian organizations like Fight Inequality are working to end global inequality, ensuring that super economies are not bringing further inequality to the world’s poor and that governments address disparities such as income and gender disparities.

– Catherine Lin
Photo: Flickr

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