The Countries with the Most (and Least) Income Equality

AddThis Social Bookmark Button

You’ve heard statistics about how 10 percent of America owns 75 percent of the wealth and that the top 1 percent makes nearly 20 percent of all income. But is American prosperity really so unequal compared to the rest of the world?

In order to see how America stacks up against other nations, FindTheData turned to the Gini ratio. Developed by sociologist Corrado Gini in the early 20th century, the Gini ratio describes a country’s income distribution on a scale of zero to one. A Gini ratio of zero indicates that every person in the country makes exactly the same amount of money. A Gini ratio of one means that just one person makes all the money.

The United States' ratio? 0.41. Proportionally, this means the top 20 percent of earners make about 46 percent of the total national income.

While that might sound fairly unequal, America is actually near the middle of the pack compared to the rest of the world. Among the 88 countries we analyzed, the average Gini ratio was 0.38. For comparison, consider that Brazil’s Gini ratio is 0.53, where the top 20 percent make 57.2 percent of the wealth. South Africa’s Gini ratio is even higher, at 0.65.

 

Meanwhile, the countries with the most equal income distribution tend to have Gini ratios between 0.20 and 0.30, such as Sweden and Norway. That said, the top 20 percent in these countries still make nearly double their share of the nation’s income (~36 percent).

 

But even in countries with a high Gini ratio (and thus, high inequality), at least new generations can work hard, ascend the income ladder, and join the top 20 percent, right?

Wrong. Unfortunately, the Gini ratio is highly correlated with another metric, called intergenerational earnings elasticity. While it sounds complicated, earnings elasticity simply describes how closely a parent’s income will dictate future income for his or her child. It turns out that the most unequal countries, like Brazil, are also the most stagnant in terms of intergenerational income changes. In other words, rich families tend to stay rich, while poor families tend to stay poor.

 

Take Brazil’s elasticity score of 0.58. This means that if a father makes $10,000 more than average, his son will be expected to make $5,800 more than average. But the same is true on the opposite end. If a Brazilian father made an income $10,000 less than average, his son is estimated to make $5,800 less than average as a result.

Add it all up, and you get income immobility across the world. Countries with large income gaps—like Brazil and South Africa—might allow a rare individual to ascend the ranks, but the data says generations tend to fall in step with the one that came before.

Meanwhile, countries with more equal income distribution—like Denmark and Norway—allow for greater income flexibility between generations, but there’s less of a gap between the rich and poor in the first place, so generational changes in income aren’t as significant, anyway.

 

As a final note, it’s important to maintain the distinction between income and wealth. Both the Gini ratio and earnings elasticity metric focus on annual income—a figure that can change significantly throughout a person’s life.

Consider that 61 percent of American households will count themselves among the top 20 percent in income for at least two consecutive years, even if they begin or end their lives in a much lower bracket. Married professionals tend to break this barrier in their forties and fifties, once both partners are earning a solid salary at the same time.

Contrast income with wealth, where inheritance, investments and lifetime savings all contribute to the final number. Here, American inequality is more pronounced, a product of long-term habits, family systems and life circumstance.

So is America especially unequal, when compared to the rest of the world? It depends on the metrics you pick. For income, at least, the answer is no.

Explore Facts About Every Country on FindTheData

Haute Tease

  • Shooters Kill Five in Hours Long Stand Off in Jersey City, New Jersey

    AddThis Social Bookmark Button

    A decorated Jersey City Police detective, the wife of a store owner, and two members of the Jewish community were gunned down yesterday in Jersey City, N.J., by two members of the Black Hebrew Israelite militant group.

     
  • Kim Wall Murder: Peter Madsen - Mad Scientist or King of the Fetish

    AddThis Social Bookmark Button

    Denmark's most sensational murder trial has yet to begin and the world media is ramping up its coverage on Peter Madsen, the Danish inventor who is currently held in the horrific dismemberment and murder of Swedish journalist Kim Wall.

     
  • Celebrity Auction Benefits Juvenile Diabetes

    AddThis Social Bookmark Button

    Briggs and Riley, the manufacturer of Travelware, a high end innovated luggage design company, has teamed up with the Juvenile Diabetes Research Foundation of Long Island to raise money in the fight toward finding a cure for Juvenile Diabetes.

     
  • The Step, the Hot Pick of UK Student Radio, Release New Single and Video 'Stay Awake'

    AddThis Social Bookmark Button

    "Hot Pick" of the UK Students Radio Chart Show 2016, The Step is an Indie Pop/Rock band based in London. Founded in Rome in 2007 by Stefano Donato, the band moved to London where Oliviero Fella joined in 2013.  

  • Beltway Insider: Year in Review - Global Terrorism, Tragedies, Donald Trump and Twitter

    AddThis Social Bookmark Button

    As the world rings in the New Year, 2017 will be remembered for unleashing a wave of global terrorism, unprecedented natural disasters, mass shootings, and a corrupt White House administration that changed the accessibility to the President.

     
  • Don’t Worry He Won’t Get Far on Foot Review – An Extraordinary Film that Delivers Powerful Performances

    AddThis Social Bookmark Button

    Don't Worry He Won't Get Far on Foot, from Amazon Studios, brings to the screen the true story of John Callahan, and his amazing transformation from broken, directionless alcoholic to paralyzed, sober, artist who finds purpose.

     
  • Haute Home: The Brand Best Equipped to Become the Smart Home King

    AddThis Social Bookmark Button

    Sixteen years after the Disney Channel released the spooky, made-for-TV movie “Smart House,” the film now seems positively prophetic. Complete with voice commands, temperature control and a pleasant, Siri-like response system, Disney nailed several of the next decade’s tech breakthroughs. It’s as if the filmmakers knew we’d get Nest, Google Now and Apple TV in just a few short years.

     
  • Jimmy Carter Rock and Roll President Review – Four Stars! An Entertaining, Engaging, Oscar Bound, Biopic

    AddThis Social Bookmark Button

    Jimmy Carter Rock and Roll President, from CNN Films and Not Just Peanuts Productions, present the unlikely story of a peanut farmer who became president and the southern rockers who would propel this simple man to the Oval Office.

     
  • World News: Netanyahu Razor-thin Win Moves Israel Right

    AddThis Social Bookmark Button

    With 97% of the vote counted, Prime Minister Benjamin Netanyahu's right-of-center Likud party has sustained a razor-thin win, defeating Benny Gantz's left-leaning Blue and White party, receiving 37 seats to Gantz's 36, but the victory is actually much greater than it appears.

     
  • LOGAN Review - A High Octane, Hard Charging, Tough and Tender, Thrill Ride

    AddThis Social Bookmark Button

    LOGAN, from Twentieth Century Fox, Marvel Entertainment, and TSG Entertainment, presents the last installment of the X-Men series bringing to the screen a hard charging, hard living, uncompromising, take no prisoners, fight to the death finale.

     
  • While We’re Young Review – A Fresh Comedic Middle Age Drama

    AddThis Social Bookmark Button

    While We’re Young, from Scott Rudin Productions and A24, brings to the screen an engaging comedic drama filled with culture clashes, passion points and middle aged awakenings pairing realistic dialogue with very real situations to deliver a charming, appealing, back to the future trip.

     
  • Florida Bank Shooting Brings Year Total to 19

    AddThis Social Bookmark Button

    The execution style murder of five women inside Sebring SunTrust Bank in Sebring, Florida, brings the total of Mass Shootings for 2019 to nineteen as authorities still work to determine a motive in the senseless killings.

     
  • Beltway Insider: Obama, Allies Meet; Syria/Refugees/Counterterror; Election; Rings of Fire; Invictus; Kobe Bryant

    AddThis Social Bookmark Button

    President Obama will travel this week to Saudi Arabia, Germany and the United Kingdom continuing to strengthen the global coalition and commitment in the destruction of the Islamic State and firming the support for the reunification of the Ukraine.

     
  • Business News: Emir Bahadir, Turkish Playboy, Mogul, Graces The Cover Of Social Life Magazine’s September Issue

    AddThis Social Bookmark Button

    In an exclusive interview with Social Life magazine, the premiere luxury publication for the Hamptons, Entrepreneur and Bahadiring Realty Founder and Principal Emir Bahadir opens up about his professional journey, life's lessons, perseverance and inspirations.

     
  • Cannes Film Festival to Pay Tribute to Robert De Niro with a Hands of Stone Special Screening

    AddThis Social Bookmark Button

    Hands of Stone, from The Weinstein Company, presents Robert De Niro in a role that already has insiders buzzing about the possibility of a golden season for one of the most revered and legendary actors in film history.