Income inequality is rising in many countries of the world especially in emerging countries and some developed countries. The Gini coefficient is one way to measure inequality. The higher the number the more inequal a country is. The chart below shows income inequality in emerging and select developed countries:
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Inequality is a major issue in emerging countries due to corruption and other factors. Among advanced countries income inequality is the highest in the US and low in the Eurozone countries. This is because the US is a capitalist country where capital rules and the winner take all philosophy is followed. Eurozone countries on the other hand follow Socialism where the economy is designed towards social welfare rather than capital accumulation by some at all costs.
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Source: Inequality- is it increasing? What’s driving it? And what it means for economic growth and investors, AMP Capital.
According to the above charts, the US is just one step above emerging countries from an inequality perspective. Whether rising income inequality is good or bad for a country remains to be seen.
