While income inequality has reached a new extreme in the U.S., Western European countries have experienced slightly less severe gaps. The top 10 percent of earners hold about 37 percent of wealth in Europe, and the income share captured by the richest one percent in the region has only risen from about 10 percent in 1980 to about 12 percent in 2016, compared to the rapid rise in the U.S.
Meanwhile, the Middle East, Africa, and Brazil were noted as places where income gaps haven’t grown much in the last four decades—instead staying at a severe level since 1980. In Brazil and sub-Saharan African nations, the wealthiest 10 percent of the population own about 55 percent of the national income, while in the Middle East they control more than 60 percent.
The World Inequality Report was released a day after the World Health Organization and the World Bank published its own study showing that nearly 100 million people around the world are forced to choose between healthcare costs and other necessities, including food and education, due to extreme poverty.
“Furthermore,” the WHO-World Bank study notes, “some 800 million people spend more than 10 percent of their household budget on health care, and almost 100 million people are pushed into extreme poverty each year because of out-of-pocket health expenses.”
In addition to access to education and a living wage, the World Inequality Report recommends progressive tax structures as a way to combat soaring inequality around the globe, as well as a crackdown on tax havens among the wealthy, like those detailed in the recently-released Paradise Papers.
In their report, Piketty and his fellow economists say that rising global inequality is “not inevitable in the future” and point to European nations, who have enacted policies specifically designed to lessen the gap between rich and poor. “If in the coming decades all countries follow the moderate inequality trajectory of Europe over the past decades,” they write, “global income inequality can be reduced—in which case there can also be substantial progress in eradicating global poverty.”
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