Editor's Note: Dr. James M. Lindsay is a Senior Vice President at the Council on Foreign Relations and co-author of America Unbound: The Bush Revolution in Foreign Policy. Visit his blog here and follow him on Twitter.
By James M. Lindsay, CFR.org
Growing income inequality in the United States has attracted a lot of comment. But figures from the Organisation for Economic Co-operation and Development (OECD) show that greater income inequality is not a U.S.-only phenomenon. Income inequality is up across rich countries.
Economists use something called the Gini coefficient to measure inequality. It is a scale that runs from zero to one, with zero indicating total equality (everyone makes the same amount) and one indicating total inequality (that is, one person gets all the income and everyone else gets nothing). As the chart above shows, the Gini coefficient rose over the last quarter century in seventeen OECD countries.
What may be most remarkable about the numbers is that income inequality was up not just in traditionally higher income-inequality countries such as Mexico, the United States, and Israel, but also in traditionally lower income-inequality countries such as Germany, Finland, and Sweden.
The fact that income inequality is up almost across the board might seem to suggest that globalization and technology are to blame rather than the specific tax, spending, and regulatory choices that individual countries make. After all, globalization and technology are universal in their impact while countries follow very different national economic policies.
The OECD’s economists, however, say that the jury is still out on the causes of greater income inequality. Which brings to mind something I read once to the effect that if you lay all the world’s economists end to end you will never reach a conclusion. So let the argument continue.
The views expressed in this article are solely those of James M. Lindsay.