Saturday, October 26, 2013

THE CHART that explains the world:

On the far right of the chart is one of the two biggest “winners”: the 60m or so people who constitute the world’s top 1 per cent. About half of these are the richest 12 per cent of Americans. The rest of the top 1 per cent is made up by the top 3-6 per cent of Britons, Japanese, French and German, and the top 1 per cent of several other countries, including Russia, Brazil and South Africa.

The even bigger “winner” is the new global middle class, particularly in China and India. In 1988, a median earner in China would be richer than only 10 per cent of the world’s population. Twenty years later, that median income would put the average Chinese in the top half of the global income distribution.

On the far left of the chart is one of the two biggest “losers”: the very poorest. (This picture is probably too rosy given problems with data collection. Researchers find it tough to get data from people at the very bottom and very top of the global income scale.) The other, around the 80th percentile, is what Prof Milanovic calls “a global upper middle class” – including many people from former Communist countries, “as well as those citizens of rich countries whose incomes stagnated”.

“It was probably the profoundest reshuffle of people’s economic positions since the industrial revolution,” Prof Milanovic writes of these 20 years.