You’ve heard the old line about how a “rising tide lifts all boats?” In fact, the evidence shows that the “rising tide” of global economic growth is in fact lifting mostly yachts; meanwhile, a lot of people are getting dumped in the water.
Oxfam recently released new research that shows how people’s incomes are becoming more unequal in the world’s largest economies. Oxfam focused on the G20 countries because they are the self-appointed leaders of the global economy and, indeed, constitute more than 70 percent of the world’s GDP. A survey of the G20 countries shows that only four have made progress since 1990 in reducing inequality; 16 have seen the income gap grow, slowing or stopping progress to reduce poverty. Not only is economic growth in those countries failing to “trickle down” to ordinary people, but the G20 economies are rapidly exhausting the natural resources they need to support our health and prosperity. That ecological burden falls most on the poor, who by and large lack the resources to cope with the resulting environmental degradation, particularly from climate change.
In the past, this inequality and ecological plunder would be seen as part of the cost of supporting economic growth. Conventional wisdom used to be that growth brings inequality; a rising tide lifts all boats, but rich boats rise faster, and that’s the cost of doing business. But this conventional wisdom is being shown to be false in practice; in fact, some of the planet’s fastest-growing economies are growing while reducing inequality, and reducing their ecological impact.