Inequality is a stubborn problem
A new study that analyzed the correlation between education and surnames in England between 1170 and 2012 shows that a family’s social status can last for eight centuries or more. Not only does this study show how far back privilege (and the lack thereof) goes, it also shows how stubborn economic inequality is to major social and economic changes, Quartz reported today. “Even more remarkable is the lack of a sign of any decline in status persistence across major institutional changes, such as the Industrial Revolution of the eighteenth century, the spread of universal schooling in the late nineteenth century, or the rise of the social democratic state in the twentieth century,” said the report’s authors, Gregory Clark of the University of California, and Neil Cummins of the London School of Economics. In a book published earlier this year, Clark also tracks surnames and social status across different societies, such as feudal England, modern Sweden and Qing Dynasty China. Clark’s research is notable because it shows that a family’s wealth can take 10 to 15 generations to dissipate, rather than the three to five generations estimated by other scientists.
Are Danes over-reacting about income disparity?
Denmark suffered Europe’s biggest leap in income disparity during the debt crisis, so it is no surprise that inequality is high on the country’s priority list as it goes into an election year. Denmark saw a 12 per cent increase in inequality from 2008 to 2012, leaving it the most unequal country in the Nordic region. But the country’s finance minister, Bjarne Corydon, is arguing for a measured approach to dealing with the problem. “There’s room to make Denmark a place where it’s OK to make more money, even if you make a lot of money already,” he told Bloomberg today. Corydon added that Danes should not reject on principle the idea that conditions can improve for the poorest members of society while also improving for the wealthiest. He also said he finds it “peculiar that this has become a sensitive issue in Denmark” because the scale of inequality “shouldn’t be a cause for concern.” A survey published today by YouGov and Esben Hoegh, a political scientist, show that Danes do have a tendency to over-estimate their nation’s level of inequality.
British youth struggling to make ends meet
Yet another damning report released today by the Joseph Rowntree Foundation shows that young adults in the U.K. are increasingly impoverished, while poverty among pensioners is at an all-time low. The report looked at two age groups, 16 to 19 year-olds and 20 to 24 year-olds, and found that 34 per cent and 29 per cent are living in low-income households, respectively. Both age groups saw a six per cent increase in poverty rates over the last decade. At the same time, 13 per cent of pensioners are living in low-income households, compared to 24 per cent in the previous decade.
Canada could face widening prosperity gap
A report released in Canada today shows that the government needs to address income inequality head on if it doesn’t want to follow in the steps in the United States. “If Canada doesn’t want to have higher income inequality in the future, governments will have to lean against the trend towards that outcome,” said the paper’s authors, Craig Alexander, chief economist of Toronto-Dominion Bank, and Francis Fong. The paper says increased globalization and technology are partly to blame for growing economic fault lines in Canada. The authors recommend a review of the country’s tax system to make it more progressive and redistributive.
Wealthy Americans are leaving the U.S. and taking their money with them
While immigration reform is at the top the agenda in the U.S., Charles Kenny for Bloomberg Businessweek suggests that the government also take a look at making emigration more profitable for Americans. “Why should they be able to walk out of the country with resources that they have accumulated largely by dint of their history in the U.S.?” he says, pointing out that it is easier for rich people to move to other countries. Approximately 7 million U.S. citizens live abroad, and 45,000 leave each year. To make matters worse, a number of them are giving up their citizenship now that the Internal Revenue Service has started collecting taxes from overseas citizens with incomes over $100,000. Kenny points to Eduardo Saverin, co-founder of Facebook, as an example. Renouncing his U.S. citizenship could save him as much as $100 million in taxes. Kenny recommends a progressive exit tax for those moving abroad, saying it would only affect the top 10 per cent of the American population, which holds 75 per cent of the country’s wealth.