What is global inequality?

Imagine lining up everyone on the planet by their wealth and status. On one end, a small group of individuals that have few, if any, barriers to living a full and healthy life. On the other, a larger group of people who find themselves excluded from the possibility to do the same.

Understanding global inequality starts with recognizing that not everyone enjoys the same rights, treatment, and opportunities. If you face generational poverty or gender discrimination, these barriers to equality can have profound implications for the kind of life you want to live.

At Oxfam, our mission is to fight global inequality to end poverty and injustice. So we’re going to explore global inequality, step by step: What is it; how is it measured (and do different ways of measuring it matter); and how we can reduce global inequality toward ending poverty and injustice.

So what is global inequality?

Global inequality is the unequal distribution of resources, opportunities, and power that shape well-being among the 8 billion individuals on our planet. Distinct from inequality within a country or between countries, global inequality is one way of understanding the different lived experiences of our fellow humans, no matter where they live.

Notably, global inequality is worse than inequality within countries. And economic inequality—the unequal distribution of income—is one strikingly visible dimension of global inequalities in well-being.

• In the early 1800s, individuals worldwide had more similar living standards, and differences in wealth and income were closer.
  
  
• Global inequality grew substantially after the Industrial Revolution, sparking rapid income growth in Western Europe, the US, Australia, Canada, and New Zealand as compared with incomes in other countries.
  
  
• Fast forward to today, the 10 richest men in the world own more than the bottom 3.1 billion people.
  

Economic inequality often interacts with other kinds of disadvantage that result from power imbalances in society worldwide. For example, the absence of women’s voices in decision-making spaces or a caste system that discriminates against sectors of society with lower status reflect cultural, political, and social inequalities that undermine people’s well-being.

• Nobel Prize-winning economist Amartya Sen calls the array of things that make up well-being “capabilities.”
  
  
• Capabilities are essential “freedoms” that make it possible to live a full and healthy life. They come from having adequate resources and the ability to use those resources with ease and purpose.
  

In other words: Global inequality stems not just from what people have and don’t have—but what they're able to do with what they have.

How is global inequality measured and does how you measure it matter?

Global inequality can be measured and understood in many ways. Some economic measures focus on the share of income that middle-income groups of people enjoy over time, while others look at the growing wealth among the richest in society.

• According to the World Bank, global inequality is on the rise for the first time in decades because the poorest 40 percent of the world lost twice as much income as the wealthiest 20 percent during the global pandemic. It's the largest increase since 1990.
  
  
• But Oxfam considers an alternative measurement: the ratio of income share held by the richest 5 percent as compared with the poorest 40 percent. This approach tries to better capture the extreme concentration of wealth and income.

This widening inequality is a major risk to human flourishing. Unequal treatment breeds distrust, and countries with high inequality grow more slowly—closing off opportunities for economic advancement. Measures that focus on extreme wealth and income also make it easier to see how structural policy choices widen gender and racial inequalities.

So what do we learn by taking a closer look at the growing gap between the rich and the poor?

• 252 men have more wealth than all 1 billion women and girls in Africa, Latin America, and the Caribbean, combined.
  
  
• In the US, 3.4 million Black Americans would be alive today if their life expectancy was the same as White people’s. Before COVID-19, that alarming number was already 2.1 million.
  
  
• Twenty of the richest billionaires are estimated, on average, to be emitting as much as 8,000 times more carbon than the billion poorest people—increasing the risk of climate-driven humanitarian crisis.
  

“The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little,” said former US president Franklin Delano Roosevelt.

How can we reduce global inequality? What could it mean for ending poverty and injustice?

We all have a role to play in creating a more equal future, but governments and the private sector must be responsive to the perspectives and solutions of those most affected by poverty to reduce global inequality in two main areas.

• Reducing inequalities in political power
  • Corporate board rooms, international climate conferences, and national governments must be accountable to women, workers, and representatives of marginalized communities. When these groups gain power and political voice, they better influence these decision-making spaces, defining their own way out of poverty and tackling the factors that keep people poor.
    
    
• Reducing inequalities in economic power
  • Through foreign aid that supports local people and institutions as well as financial commitments that help climate-vulnerable countries tackle the climate crisis, rich industrialized countries have a central role to play in making critical investments to reduce global inequality.
  • By making billionaires and giant corporations pay their fair share of taxes, governments can direct more resources to strengthen health systems, lift children out of poverty, and grow more inclusive economies.
    

Conclusion

Where you’re born or live shouldn’t determine your future, but for too many people, inequality squanders human potential. We need to clearly see the fundamental unfairness and dangers of highly unequal societies, and we must take action to help more people enjoy the freedoms to live a full and healthy life.

While Oxfam has long focused on global inequality, inequality within the US remains a huge challenge. For workers in many states across the South, low wages, a lack of workplace protections, and prohibitions against organizing unions are worsening inequality.

But there’s hope for the future. For the last five years, Oxfam has produced the Best States to Work Index to track how states protect, support, and pay workers. Workers are demanding and winning change, organizing to form new unions, elect more helpful lawmakers, and press for changes in state laws.