Inequality Joseph E. Stiglitz Virginia Festival of the Book March 24, 2017 US: bottom 90% have seen little increase in income over last third of a century 1800000 1400000 1200000 1000000 800000 Top 1% Average Income (incl. capital gains) 600000 Bottom 90% average income (incl. capital gains) 400000 200000 0 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 Real 2014 US Dollars 1600000 Year Source: The World Wealth and Income Database (latest data available at http://www.wid. world/). 2 Median income of a full time male worker at the level that it was more than 4 decades ago (constant 2015 $) 60,000 55,000 50,000 45,000 40,000 35,000 30,000 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 3 Source: U.S. Census Bureau Note: Data is adjusted for the methodological change of 2013. Real wages at the bottom are at the level that they were roughly sixty years ago US Minimum wage in 2016 Dollars $12 $10 $8 $6 $4 $2 $0 1938 1943 1948 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 2003 2008 2013 4 Source: Federal Reserve. https://www.quandl.com/data/FRED?keyword= Levels of opportunity correlated with income Income inequality and intergenerational earnings mobility, mid-2000s Source: “United States, Tackling High Inequalities Creating Opportunities for All”, June 2014, OECD. 5 Even health and life expectancy is in decline Source: Anne Case and Angus Deaton of Princeton University, charts published in Wall Street Journal. 6 The Walton Family and The Koch Brothers’ net worth = $230 billion That’s the net worth of 150 million Americans or 44% of the country. The Walton Family The Koch Brothers 7 Global inequality: income growth by percentile, 1988-2008 8 Source: Branko Milanovic, http://glineq.blogspot.co.ke/2015/02/trends-in-global-income-inequality-and.html Globally, matters are even worse Oxfam reports on wealth concentration at the top: how many of the richest people have as much wealth as bottom 50% (bottom 3.6 billion!) • In 2014: 85 • In 2017: just 8 men Big winners during last quarter century • Global 1% and global middle class (middle class in China and India) Big losers during last quarter century (not sharing in gains) • Those at the bottom and the middle class in advanced countries 9