Rich / Poor Gap
Crunching the Numbers
The facts of the rich–poor gap are staggering. According to the United Nations, about 2.8 billion people – some 45 percent of the world’s total population – live on the equivalent of two US dollars a day or less. Some 1.2 billion of those people live on one dollar a day or less. Roughly two-thirds of those living on one dollar a day or less are female. Worldwide, the poorest 20% have access to only 1% of the total Gross World Product (GWP).
On the other side of the equation, the richest 20% of the world’s people have access to 86% of the collective GWP. In 2001 Forbes magazine counted 538 billionaires with a total net worth of 1.7 trillion dollars. Although, while it is easy to concentrate on the few very wealthy individuals in the world, the largest impact on the world and its people come from the relatively rich middle-class that comprise the majority of this group. These are the populations of the world’s industrialized nations. They employ their wealth to consume a disproportionate share of the earth’s resources on a per-person basis.
One doesn’t have to look internationally for examples of the effect of wealth inequality: It has grown steadily in the United States over the past three decades, as well. According to the US Census Bureau, the poorest 20 percent of all US households received only 3.6 percent of all household income in 2000, while the richest 20 percent received 49.7 percent of all household income. All other household groups suffered a continuing decline in their share of total household income, despite the longest and strongest economic expansion in history. Surprisingly, 22.4 percent of US children live in relative poverty, according to a 2001 study by the United Nations Children’s Fund (UNICEF).
Nor is this disparity and its consequences limited to the United States among the more industrialized nations. The same UNICEF study indicated that one out of every six children in member nations of the Organization for Economic Cooperation and Development (OECD) lives below the national poverty line, defined as half the average national income. The rate of child poverty is 26.2 percent in Mexico, 20.5 in Italy, 19.8 percent in the United Kingdom, and 19.7 percent in Turkey.
Income and GDP are not the only indicators of well-being. To better understand development issues, United Nations agencies often use the Human Development Index (HDI) as an indicator of a country’s well being. The HDI looks at three very distinct indicators when measuring a country’s overall achievements: life expectancy at birth, GDP/capita, and literacy and school enrollment.
As might be expected, the richer countries tend to fare better on the HDI. For example, Sweden, ranked 4th, has a life expectancy of 79.6 years, GDP per capita of $22,636.00 and a literacy rate of 99%. By way of comparison, Eritrea, in eastern Africa, has a 2001 HDI rank of 148 out of 162, with a life expectancy at birth of 51.8 years, a per capita GDP of $880.00 and an adult literacy rate of 52%.
Of course, the numbers and ranks by themselves don’t tell the whole story. Nations with relatively lower incomes, such as Poland, Chile, Croatia, and Costa Rica, are all ranked as having a high level of human development, while Saudi Arabia and Oman, with far higher per capita incomes are ranked as having a medium level of human development.
All these indicators share one thing in common, however. Whether they are economic, social, or educational, they reflect a person’s “wealth of opportunity” to have a fulfilling life. Indeed, Amartya Sen, the winner of the Nobel Prize in Economics portrays poverty as the denial of opportunity. The global impacts of being on either end of these opportunity scales are significant.