Increasing inequality

https://thefuturescentre.org/trend-card/increasing-inequality

Last updated: 4 March 2016

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Income inequality has a tendency to negatively impact subsequent economic growth and can result in a range of health, social and environmental problems. It can also hinder the adoption of sustainable strategies and behaviours such as climate mitigation and adaptation.

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A 2016 report by Oxfam reports that 62 people now own as much wealth as 3.5 billion of the world’s poorest people, who make up 50% of the world’s population. The number of super-rich individuals has increased by 44% since 2010 and tax havens have helped corporations and such individuals stash away an estimated US$7.6 trillion, depriving governments of US$190 billion in tax revenue every year.

On the other hand, half the world’s wealth (defined as the value of assets including property and stock market investments, but excludes debt) is now in the hands of just 1% of the population. According to Credit Suisse, a person needs only US$3,210 in savings to be in the wealthiest 50% of world citizens. About $68,800 secures a place in the top 10%, while the top 1% have more than $759,900.

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Rising income inequality within countries means there is greater potential for social unrest.

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Extremely impoverished people are at most risk from climate change, water scarcity, flooding, limited access to energy and land degradation. This is mainly because they have the fewest resources to adapt or recover quickly from shocks and they often live on the most vulnerable land that tends to be the most affordable, such as homes along creeks that flood or on hillsides prone to landslides, or farmland with limited water access. These issues will continue to have a disproportionate impact on the world’s poorest people, and could form reinforcing feedback loops unless solutions to eradicate poverty and increase resilience are undertaken in earnest.

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