“There is nothing noble in being superior to your fellow man.”
Inequality is increasing all around the world and this exacerbates the constellation of crises known as the global polycrisis. Except for the century following the Black Death pandemic (1347-1352), and the period between the 1920s and the 1970s, both income and wealth inequality have been steadily increasing for seven centuries. Even when inequality fell sharply in the 20th century, it did so only for the richer half as the top 10 percent shared their wealth with the next 40 percent, but the poorer half did not benefit.
Although worker efficiency has increased since the 1970s, inflation-adjusted compensation of middle- and lower-income workers has not kept pace. As explained by the IMF’s Andrew Stanley, “Global inequalities are in bad shape” and a World Bank report indicates that efforts to alleviate poverty are at a standstill. These disparities are not getting better, they are getting worse.
We have seen tremendous financial gains in recent decades, but instead of trickling down this money is being funneled up to the wealthy few. Wealth is increasingly being controlled by a small group of men and a few large investors who dominate the world’s economies. As the rich get richer, the vast majority are getting poorer, particularly those subjected to disparities due to their race, ethnicity, gender or sexual orientation.
The widespread effects of inequality
“Inequality does not only create immense suffering: it contributes to the death of 1 person every 4 seconds.”
Diminished opportunities including restricted access to education, health care, and housing, lowers global productivity, wastes potential, and fuels social unrest. In addition to being an economic issue, inequality wreaks havoc on people’s physical and mental health, it also fosters disunity and tears the social fabric.
The human toll extends far beyond material insufficiency. As Thal Bhandari reminds us “inequality is not just an economic issue—it’s a deeply social and psychological one.” As Bhandari wrote, “inequality isn’t just about what people have—it’s about how they feel, how they relate to others, and how they see their place in society.” Studies show that people subjected to inequality have increased levels of stress, anxiety, and depression.
Inequality also has perilous social and political costs. It tears the social fabric and erodes democracy by undermining trust in political institutions and driving support for far-right extremism. Franklin D. Roosevelt described the concentration of wealth as a “menace” to democracy. The 2024 WEF report suggests that if left unchecked, inequality will paralyze international governance mechanisms.
Wealth inequality is on the rise in the U.S.
“Over the last few decades, we have seen the concentration of wealth in fewer and fewer hands.”
The United States is at the forefront of the growing inequality trend, the country is the global leader in national wealth inequality and social mobility is plummeting. As Ben Carlson, the Director of Institutional Asset Management at Ritholtz Wealth Management pointed out, while Americans gained $100 trillion over the past 15 years, and $50 trillion since 2020, most of that money has gone to those at the top of the pyramid. As reported by UNILAD, Rand research reveals that $79 trillion has been redistributed from the bottom 90 percent of Americans to the top 1 percent in the last 50 years. The average income of the top 1 percent grew by 321 percent from 1975 to 2018. According to Carlson, the top 1 percent now controls 30 percent of all wealth in the US and the top 10 percent makes up two-thirds of the nation’s collective net worth. The top 10 percent of Americans hold 93 percent of all stocks, the highest level ever recorded, while the bottom 50 percent hold just 1 percent.
According to data from the Federal Reserve, the wealth of the top 1 percent in the US surpassed $44 trillion in the fourth quarter of 2024. The top 1 percent of Americans own half of all individually held stocks and the top 10 percent own 87 percent of individually held stocks and mutual funds.
An analysis by the Wall Street Journal indicates that the 19 richest American households control $2.6 trillion in wealth representing an increase of $1 trillion in 2024. This handful of families control almost as much wealth as the bottom 50 percent of American households.
Warren Buffet, one of the world’s best-known and most successful investors voiced his displeasure about the concentration of capital saying, “overall, this country, our output per capita goes up and up. Now, how it gets divided in the last 30 years I am not happy with.” He goes on to say the 400 richest people in 1982 have increased their wealth 25 times as of 2018 (93 billion to 2.4 trillion). According to more recent data, Forbes reported that as of 2024, the richest people in America were worth a total of $5.4 trillion.
Janelle Jones, the vice president for policy and advocacy at the Washington Center for Equitable Growth said, CEOs have “made over 1,000 times more than a typical worker” in the last 40 years, while the pay of that same worker has “only increased 24%.” Despite serious safety issues at Boeing, the company’s CEO Dave Calhoun received a $33,000,000 pay package and a $45,000,000 golden parachute. This is the kind of inequality that illustrates the dangerous ever-widening pay gap between the elites and the rest of society.
A Second Gilded Age
“Theres something unique about the United States, a sense of individual rights and freedoms, and a sense of social and civic responsibility that we contributed to so much of the world. We lost that mission in the 1980s and 1990s, when we entered a gilded age, and the culture of individualism became a culture of avarice.”
As Justin Klawans wrote the US is “entering an era of increasing wealth inequality” that may be aptly called the second Gilded Age. America’s first Gilded Age in the 19th century (1870s to the 1890s) saw advances in industry and technology that combined with greed and corruption, to make industrialists, bankers and politicians extremely wealthy all at the expense of the working class. As explained by the Council on Foreign Relations (CFR), both the “late 19th and the early 21st centuries saw technological change, increased globalization, economic growth, concentration of wealth, and rising inequality.”
The first Gilded Age was built on railroads, steel, and oil, the second is powered by technology, finance, and pharmaceuticals. The technological optimism that defined the first Gilded Age also defines the second. Both are rooted in structural inequality, specifically the socially destructive hope that technology can enable us to rise above the rest of humanity. Both eras also experienced “increased immigration, changing demography, and a decline in standing for less-educated rural whites.” During the first Gilded Age, new tools were developed to respond to the crisis. CFR cites the retreat into ignorance, culture wars, and performative outrage for its pessimistic view that we are unlikely to come up with an adequate response to a “declining country” and the emerging gig economy.
The uneven distribution of wealth around the world
Inequality has been on the rise across the globe for several decades.
The US is not the only country to see tremendous surges in disparity; inequality is increasing in countries all around the world. According to the GINI Index, the Middle East suffers from rampant inequality, led by the UAE and Saudi Arabia. Inequality is increasing across Europe including the UK, Switzerland, Austria, Belgium, and the Netherlands. It is also increasing in Germany, where two families own as much or more wealth than 42 million Germans or half the population. In Russia, government data indicates that the incomes of Russia’s richest 10 percent are growing twice as fast as those of the poorest 10 percent.
Inequality is also rising in Australia and Asia led by China, South Korea, and Japan. In India, income inequality is worse now than it was during British Rule. Africa is the poorest continent on Earth, and it is no coincidence that it suffers from the worst inequality. This wealth is highly concentrated with Just five countries (South Africa, Egypt, Algeria, Nigeria, and Ethiopia) providing half the continent’s GDP. In places like sub-Saharan states, almost half live below the poverty line.
Almost three quarters of people live in countries where inequality is growing and 692 million people lived below the $2.15 per day poverty line in 2024. It is no surprise that most of these people reside in countries in the Global South.
Gender disparities are a salient part of global inequality. The world’s richest 252 men, largely white males from the global north, own as much wealth as all the 1 billion women and girls that inhabit Africa, Latin America, and the Caribbean.
Growing economic disparity between the Global South and Global North
“Our findings indicate the Global North’s outsourcing practices are contributing to a widening divide between countries that benefit from trade and those that bear the brunt of its adverse effect…This dynamic not only perpetuates economic disparities but also exacerbates social and environmental challenges in the Global South.”
There are profound inequalities between developing countries in the Global South and wealthy countries in the Global North. Research by Arunima Malik (Malik et al, 2024) published in Nature Sustainability reveals that trends in international trade are exacerbating inequalities, and undermining efforts to achieve the United Nations Sustainable Development Goals (SDGs). Malik’s research shows how wealthy countries are, “shifting the burden”…[of]…environmental and socially detrimental production to low-income nations.”
A study by Hickel (Hickel et al, 2024) published in Nature Communications, concludes that this inequality is due to systematic wage disparity, with southern wages being 87–95 percent lower than Northern wages for work of equal skill. While Southern workers contribute 90 percent of the labor that powers the world economy, they receive only 21 percent of global income.
The income gap is widening: The rich are getting richer
“We are purposefully transferring more and more wealth from the lower and middle class to the upper class, to the super rich and from the young to the old…We have decided that the richest people in the world should get exceptionally more wealthy.”
The gulf between rich and poor is big and getting bigger as more and more wealth is being concentrated in the hands of fewer and fewer people. According to Alfani (Alfani 2024), inequality has been steadily increasing since the mid 1970’s, and Oxfam reports that a new billionaire is being “minted” every day. The concentration of wealth and power has accelerated since the recession of 2008 while the vast majority of people are experiencing declines in their standards of living.
As reported by Fortune, the world’s billionaires now hold more wealth than every country in the world except the US and China. According to the World Inequality Report, the top 10 percent of the world’s population owns 76 percent of the world’s wealth and rake in 52 percent of global incomes while the poorest half earn just 8.5 percent of the global total. This gives the richest 10 percent 190 times the purchasing power of the poorest half of the global population.
The top 1 percent own half of almost everything (Scheffer et al. 2017). The Oxfam analysis indicates that the richest 1 percent have amassed $42 trillion in new wealth over the past decade, nearly 34 times more than the bottom 50 percent of the world’s population. The average wealth per person in the top 1 percent rose by nearly $400,000 over the last 10 years compared to $335 for those in the bottom half. The share of global wealth of the 1 percent has swelled from 25 percent in the 1980s to approximately 40 percent in 2016. That number increased to 47.5 percent in 2024.
Research by Fichtner (Fichtner et al, 2017) published by the University of Amsterdam, concluded that a tiny cabal of investors are in control. Three companies (BlackRock, Vanguard, and State Street) are the largest shareholders in 88 percent of the firms listed as S&P 500 passive index funds.
The rich acknowledge that they are reaping almost all the benefits. Buffet is one of the wealthiest men on Earth and when asked who is winning, he responded, “the rich guys, like me.”
Financial crises benefit the elite
“Billionaires have had a terrific pandemic. Central banks pumped trillions of dollars into financial markets to save the economy, yet much of that has ended up lining the pockets of billionaires.”
While the wealthy prosper during financial crises the rest suffer. Financial crises are inevitable, and the resulting corrections benefit those on the top while hurting those on the bottom. In the US, the financial crisis of 2008 wiped out $11 trillion in wealth. Housing prices fell by nearly 30 percent, the stock market crashed by almost 60 percent, and the unemployment rate hit double digits. The standard of living declined for most, but it was a windfall for the richest 1 percent who claimed 95 percent of the post-recession gains. Average Americans are the ones who absorbed the blow, and the bleeding continued for the bottom 50 percent long after markets stabilized.
A similar picture emerged during and after the COVID-19 pandemic (2020-2023). According to Oxfam, billionaires’ saw a $5 trillion increase in their wealth post-pandemic which represents the biggest surge in billionaire wealth since records began. The 1 percent has taken in two-thirds of all the wealth created since 2020 which is double the other 99 percent and nearly 24 times more than the average. The bottom 50 percent now own just 2 percent of household wealth.
Oxfam reports the 10 richest men more than doubled their fortunes ($700 billion to $1.5 trillion) during the first two years of the pandemic. “If these ten men were to lose 99.999 percent of their wealth tomorrow, they would still be richer than 99 percent of all the people on this planet,” Bucher said, adding, “They now have six times more wealth than the poorest 3.1 billion people.” To put this into perspective, as the incomes of middle- and lower-income earners fell and over 160 million people were pushed into poverty, these men were collectively raking in $15,000 per second or $1.3 billion a day. According to former Labor Secretary, Robert Reich, the world’s five richest men have doubled their wealth since 2020, while 5 billion people have become poorer.
The World Bank acknowledges that low and middle-income countries are less resilient. The billionaire class is growing and so is the number of people living below the poverty line. The middle class is under siege and disappearing at a rapid rate. This is true even in the US where Pew Research indicates the number of middle-class households fell from 61 percent in 1971 to 50 percent in 2021. The reason the rich are exceptionally resilient to financial crises is not because they work harder, it is because they are operating in a rigged system that serves their interests at the expense of low- and middle-income earners.
Inequality is a function of a rigged system
“But the poor person does not exist as an inescapable fact of destiny. His or her existence is not politically neutral, and it is not ethically innocent. The poor are a by-product of the system in which we live and for which we are responsible. They are marginalized by our social and cultural world. They are the oppressed, exploited proletariat, robbed of the fruit of their labor and despoiled of their humanity. Hence the poverty of the poor is not a call to generous relief action, but a demand that we go and build a different social order.”
Disparity is a byproduct of the economics of neoliberalism that not only thrives on inequality but requires it to function. Neoliberalism gives the market free reign and advances self-justifying narratives like austerity policies and opposition to taxation which have been shown to benefit the wealthy and harm medium and low-income earners.
Neoliberal economics also justifies the exploitation of an underclass (Brockmann & Garrett, 2022). Exploitation is sewn into the fabric of neoliberal economics because it prioritizes the pursuit of profit or surplus (the difference between the wages paid and the amount of work done). At its core neoliberalism is driven by a steely determination to extract the maximum amount of surplus value. Market pressures drive down wages to maximize profits. This is exemplified by the Atlantic slave trade, which forcibly abducted and transported millions of Africans to the Americas. The impacts of which are being felt to this day. A 2019 study (Jackman & Shauman, 2019) of US mortality rates attributed the deaths of 7.7 million African Americans to racial inequality in the twentieth century. Although slavery is now illegal, access to cheap labor has been maintained by entrenched inequalities that create an underclass comprised of marginalized communities including the descendants of slaves.
While the roots of inequality can be traced into the mists of prehistory, through ancient civilizations, to feudalism, colonialism, and imperialism, today it is due largely to the entrenched structures of our neoliberal economic system. The current-day economic trends that contribute to inequality include outsourcing, globalization, and the waning power of labor unions.
The root causes of disparities are not only structural they are also due to deeply embedded cultural factors. This includes social hierarchies like those associated with class, race, gender, and caste. It also includes racist ideologies that suppress the traditions, languages, and identities of others. This is part of a program of dehumanization that is used to justify inequality.
The widening income inequality gap may be best understood as a manufactured crisis. Background inequalities are built into the economic system. Politicians and institutions are complicit in perpetuating inequality regimes through deeply embedded broken assumptions that permeate our legal, educational, and fiscal systems. We are steeped in the neoliberal lies that promote inequality including the trickle-down fallacy.
The trickle-down fallacy
“This is the lie they tell you, all this money flowing towards monied corporate interests is actually for your benefit.”
Neoliberalism perpetuates the idea that if we reduce the tax burden on the rich it will trickle down to the wider society. However, in the last half-century it has become abundantly clear that not only does wealth not trickle down it tends to trickle up.
Benefiting rich people shifts the burdens onto everyone else. A 50-year study (Hope & Limberg, 2020) reveals that tax cuts do not supply jobs, but they do increase inequality. Nonetheless, most Western economies are still premised on the false assumption that everyone benefits from easing the tax burden on the wealthy.
The erroneous belief that wealth trickles down and benefits the wider economy is one of the key assumptions that keep inequality regimes alive. Buffet, whose profound understanding of financial markets, earned him the appellation “the Oracle of Omaha” said, “trickle down has not worked really well and it pushed upward basically instead”.
Trickle-down economics is a fallacy that takes public money out of schools, healthcare, and mass transit. Increasingly, the tiny minority are reaping the benefits while incomes and standards of living decline for the vast majority. As Reich explained, “wealth does not beget more wealth.” Decades of data conclusively demonstrate that trickle-down economics is a lie. While it has increased corporate profits, it has also caused declines in real wages. That is why Reich and others refer to “trickle-up” economics as the transfer of wealth from the many to the few.
Promoting the trickle-down fallacy is not new. In 1932 Will Rogers laid out the ruse in a column that criticized the Republican’s appropriation of money for those at the top and specifically the false promise that this money will reach the common man. As Rogers wrote, “money trickled up” adding, the “little ones went up the flue.”
Trickle down is not a well-intentioned miscalculation; it is a cynical ploy masquerading as economic policy. Efforts to cast it as a great equalizer are part of a deliberate strategy to funnel wealth upwards. This is the deception that laid the foundation for the burgeoning disparities we see today.
Trickle-down economics is a Trojan horse. Under the guise of universal prosperity, it has infiltrated the core of our economic system in service of a plan that seeks to benefit the wealthy. As many economists have noted, and as we’ve painfully witnessed, this approach has only exacerbated the concentration of wealth. Corporate strategies, emboldened by this flawed ideology, have increasingly prioritized shareholder value and executive compensation over fair wages and equitable distribution of gains.
Climate change and increasing inequality
“The impacts of climate change also risk worsening inequality.”
- International Monetary Fund (IMF)
In addition to undermining democracy, unraveling social ties, and harming people’s physical and mental health, inequality exacerbates global warming which is one of the most serious existential threats ever faced by humanity. The savage irony is that the poor, who have done the least to contribute to the crisis are the ones who are hardest hit, while those who are responsible for the bulk of emissions are reaping enormous financial windfalls. They then pass the costs of climate change on to taxpayers, the brunt of which is borne by the lower- and middle-income earners.
As reported by BBC, Stanford University researchers found that each year wealthy individuals are responsible for 100 tons of CO2 while the average person generates around 2 tons. A more recent study published in Nature Climate Change finds that the world’s wealthiest 10 percent are responsible for 66 percent of observed global warming since 1990.
While climate change has made the rich richer, the average person will be 40 percent poorer if current warming trends continue. A study published in the Proceedings of the National Academy of Sciences journal, concludes that global warming has contributed to the GDP per capita of several rich nations, including some of the world’s biggest emitters of GHGs. The Stanford research indicates the gap between the world’s poorest and richest countries is about 25 percent larger today than it would have been without global warming.
To make matters worse there is a feedback loop between climate change and Inequality, with each exacerbating the other. In addition to driving warming, inequality also undermines our capacity to curtail emissions.
Referring to the Stanford study, Happy Khambule, senior political advisor at Greenpeace Africa, explained, “The findings of this study are consistent with what has been known for years, that climate change acts as a threat multiplier, and takes existing vulnerabilities and makes them worse.”
Conclusion: Dispelling the myth that inequality is inevitable
“The disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition is the great and most universal cause of the corruption of our moral sentiments.”
Inequality is dismantling the Earth’s ecosystems upon which all life depends, and the physical mental, and emotional toll of extreme disparities is devastating. The US is ushering in a second Gilded Age and the concentration of wealth is growing all around the world. Wealthy countries and multinational corporations hold disproportionate control, and they are perpetuating cycles of inequality. Nowhere is this more apparent than in the growing gulf between the Global South and the Global North.
The rich are getting richer and the crisis that such concentrations of wealth augur benefit the elite and burden those who can least afford it. Despite all the harm they cause, we continue to venerate the accumulation of obscene amounts of wealth. Most do not realize that this wealth was not earned; it was stolen from those who have the least to give.
Inequality is a cynical contrivance of a rigged system that promotes lies like trickle-down economics. The most dangerous lie we have been told, even more dangerous than the myth of trickle-down economics, is the idea that we can do nothing about it and that the power of the system is inescapable.
The damage done by structural disparity cannot be overstated. “Extreme inequality is a form of economic violence, where policies and political decisions that perpetuate the wealth and power of a privileged few result in direct harm to the vast majority of ordinary people across the world and the planet itself,” Oxfam briefing.
The logic calling us to address the scourge of inequality could not be more convincing. Inequality is incompatible with basic notions of fairness, social peace, and the health of people and our biosphere. Like the divine right of kings, we must dispel the myth of the inevitability of inequality.
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