Geography Reference
In-Depth Information
Table 1.3.2
Income inequality in selected world regions
Ratio of the earnings of the richest to the
poorest 20 per cent of the population
Region
Latin America and the Caribbean
20
Sub-Saharan Africa
18
Middle East and North Africa
10
East Asia and Pacific
9
High Income Nations
8
Europe and Central Asia
6
South Asia
5
Source
: World Bank Development Indicators, 2008
wealthiest 20 per cent of the world's population consumed 76.6 per cent
of the world's goods. And more than 80 per cent of the world's popula-
tion lives in nations where income differentials are widening.
The same is true at the continental scale within the developing world,
as shown in Table 1.3.2 and based on World Bank data. Inequality in
high-income nations stands at around 8, measured by the ratio of the
earnings of the poorest versus the richest 20 per cent of the population.
This ratio is as high as 20 times in the case of Latin America and the
Caribbean, and high in sub-Saharan Africa (18 times); other areas are
also high, such as the Middle East and North Africa (10 times) and east
Asia and the Pacific (9 times).
In addition, available data and evidence show that with greater
equality, important variables like educational attainment and life
expectancy are enhanced. As income and wealth inequality increase,
health and social problems rise, as do the incidences of mental ill-heath,
drug use, child mortality, levels of imprisonment and homicide rates (in
rich countries). For example in relation to homicide levels, the USA
shows high inequalities and high murder rates, while Japan, Norway
and Denmark illustrate the reverse.
There is a strong argument that inequalities increase social tensions
at all levels in society. This gives rise to the argument that as well as
having a minimum wage, for the sake of social cohesion there needs
also to be a maximum wage. For example, it has recently been argued
that the CEO or head of an organization should earn no more than, say,
20 times the lowest paid worker.
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