In cities around the world, the gap between the rich and the poor is widening.
And in each of these cities, that growing inequality comes with a cost.
The greatest cost is the political and economic instability that accompanies vast disparities of wealth, Nobel Prize-winning economist Joseph Stiglitz told GlobalPost, using the United States as an example.
“We are paying a very high economic price for this inequality — our economy is less productive and efficient,” Stiglitz said. “We are also paying a price in terms of our politics and our society — inequality is undermining our democracy and our basic values.”
In this first set of stories of a GlobalPost Special Report titled “The Great Divide,” correspondents around the world are examining the global phenomenon of income inequality and why it should matter to all of us.
To most Americans, this inequality seems an obvious and age-old reality of the developing world, a cliché of the global economy.
In countries like Brazil, it is not news that the searing poverty and violence of the favelas on the hillsides of Rio tumble down to the beachfront palaces of Brazil’s ‘plutocrats,’ as author Chrystia Freeland calls the “global super-rich.”
We carry images of India with the vast and intractable poverty in cities like Mumbai up against the new wealth of a small elite generated through India’s surging business sector of technology and innovation.
We may accept that places like Thailand have desperately poor swaths of the city where people live in shanties and that they lie a stone’s throw from the shiny, downtown shopping centers where there Gucci and Apple stores thrive with the business of the high society, or “hi so,’ as they are referred to in Bangkok.
But what most Americans don’t realize is that the Gini coefficient, a metric of inequality used to measure the income gap worldwide, in many developing countries mirrors the gap in many American cities. To tell that story, For the last six months, GlobalPost correspondents and editors have collected and analyzed data and sought out human narratives that reveal how income inequality globally compares to income inequality in America. In fact, Thailand's inequality almost exactly matches that of Fairfield County, Connecticut. Brazil's is remarkably close to that of Selma, Alabama.
The stories in The Great Divide examine not only the vast disparity in wealth, but the extent to which the poor believe — or not — that they can rise up out of poverty and make it into the upper echelons of wealth.
In the developing world, it seems there is a greater acceptance of income in equality as a fact of life. In America, it seems that belief is still very much alive that the poor, if they work hard enough, can become rich.
Americans hold onto this belief even as the data suggests that the middle class has crumbled and that the possibility for any American to rise from poverty to wealth is becoming increasingly difficult. Some analysts would say it is now virtually impossible.
Starting today, the work of 10 reporting teams will take readers on a journey to get at the ‘ground truth’ of inequality as shown through the lenses of education, race, immigration, health care, government, labor and natural resources. The hope that this approach might allow American readers to hold a mirror up to their own country, a chance to see how closely our income inequality compares to other parts of the world.
By Charles M. Sennott
GlobalPost Executive Editor and co-founder