Inequality is back on the political agenda. In the last few months, those launching attacks on the growing income divide include President Obama and the heads of the IMF and the OECD. The issue dominated much of the agenda at Davos, 2012.
Despite this, the income gap is continuing to widen. In the United States, 93 per cent of growth in 2011 went to the top one per cent. In the United Kingdom, the earnings gap has risen since the 2008 Crash while the number of global billionaires has gone on soaring through the crisis. While living standards are falling across much of the globe, some 1200 members of the super-rich now command economic power equivalent to a third of the size of the US economy.
There has much talk on the need to close the gap, but this has yet to be matched by action. The economic thinking that got us into this mess remains largely in place. Yet inequality is now the most urgent problem facing the global economy. The evidence is clear – inequality was a key factor causing the 2008 Crash. It is now the central explanation for the lack of recovery. The continued concentration of income and wealth is now the most significant global economic threat to jobs, livelihoods and social balance. Unless it is tackled, much of the world will remain locked in stagnating economies, near-permanent slump and social unrest.
The Great Widening will:
Stewart Lansley is a writer and economic consultant. After university he became an academic economist holding research posts at the National Institute of Economic and Social Research and the Centre for Environmental Studies specialising in poverty, inequality and wealth.He has also taught at the Universities of Reading and Brunel. He then moved into television journalism, producing many television series including Breadline Britain, Death of Apartheid, Kenyon Confronts and Food Junkies. He holds awards from the BFI, the New York TV and Film Festival, Sony, Amnesty and was nominated for a do...
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