Income Inequality Falling Without Getting Poor

The usual way that those concerned about 'income inequality' try to reduce it is by raising taxes on the prosperous, thus forcibly lowering the ceiling. The current economic growth is showing a better way: raising the floor.

1 comment:

Gringo said...

I am reminded of the brouhaha about Chavezuela, a.k.a. Venezuela under the governance of Hugo Chavez, having reduced poverty and inequality. While those figures may have been correct, they were accompanied with anemic economic growth. Compared to the rest of Latin America, Venzuela's poverty reduction from 1998-2013 was not exceptional, but middle of the road (9th out of 20). As other Latin American countries had greater economic growth compared to Venezuela, their reductions in poverty were more "sustainable."

Poverty headcount ratio at $5.50 a day (2011 PPP) (% of population), 1998 and 2013
Argentina 23.2 8.3
Bolivia (1999) 54.8 26
Brazil 44.6 19.5
Chile 29.1 10.1
Colombia (1999) 58.3 32
Costa Rica 27.2 12.3
Ecuador 60.8 26.9
El Salvador 52.2 35
Nicaragua (2014) 69.5 34.8
Panama 38.9 18.2
Paraguay (1999)37.2 20.4
Peru 53.2 26

For Venezuela: Poverty headcount ratio at national poverty lines (% of population)
1998 49%
2013 29.5%

For Uruguay: Poverty headcount ratio at national poverty lines (% of population)
2006 32.5 %
2014 9.7 %


% of Population Leaving Poverty, 1998-2013
Nicaragua 34.7%
Ecuador 33.9%
Bolivia 28.8%
Peru 27.2%
Colombia 26.3%
Brazil 25.1%
Uruguay (2006-2014)22.8%
Panama 20.7%
Venezuela 19.5%
Chile 19%
El Salvador 17.2%
Paraguay 16.8%
Argentina 14.9%
Costa Rica 14.9%

GDP per capita, PPP (constant 2011 international $)Percent increase,1998-2013
Panama 87.1%
Peru 76.5%
Chile 57.2%
Costa Rica 47.0%
Nicaragua 44.3%
Colombia 43.8%
Uruguay 42.7%
Brazil 37.8%
Bolivia 36.8%
Ecuador 33.9%
Paraguay 25.0%
Argentina 22.6%
El Salvador 22.1%
Venezuela, RB 15.0%

In order to distribute more income, you need more income to distribute.


https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.KD per capita income

https://data.worldbank.org/indicator/SI.POV.UMIC poverty headcount @ $5.50/day

https://data.worldbank.org/indicator/SI.POV.NAHC Venezuela &Uruguay poverty