7.2b Global Income Inequality

Income inequality varies worldwide. The Gini coefficient measures the extent of income inequality within a country. A Gini coefficient of zero or zero percent denotes full income equality. A coefficient closer to one or 100% reveals the most extreme inequality (see Figure 7.2). Figure 7.2 shows how the United States compares to a selection of other countries. Inequality has grown in the United States and China, while it has declined in the other countries listed in Figure 7.2.

Income inequality has increased across industrialized nations, such as the United States, Germany, and Japan, as well as in countries with developing economies, including China, Mexico, and India (Qureshi, 2023). Worldwide, 52% of global income goes to the wealthiest 10% (Chancel et al., 2022). In dollars, this means that the average individual in the world’s top 10% of earners earns $122,100 per year (Chancel et al., 2022). In contrast, the average individual from the poorest half of the global population earns $3,920 per year (Chancel et al., 2022). Income inequality is largest in the Middle East, Africa, and Latin America and smallest in Europe and East Asia.