What it’s charting is global cumulative real income growth during the 20-year period from 1988 to 2008: how much people’s income has gone up or down, at every percentile, around the world. I spotted it in an article by Branko Milanovic, visiting presidential professor, Graduate Center, University of New York and senior scholar, Luxembourg Income Center. Yunno, one of those “experts.”
I’m stoked. This is definitely going to be good news. After all, the number of people living in absolute poverty has dropped by more than half over this period -- hitting the Millenium Development Goal five years ahead of schedule. In May, the COO of the World Bank noted that, “For the first time in history, the number of people living in extreme poverty has fallen below 10%.” Surely a graph of change in incomes over time will reflect these positive trends — right?
Well, sure. It does. The shift away from extreme and absolute poverty is shown in the middle of the graph, at the top of the elephant’s head, around the 50th-60th percentiles. Those are the jobs created by the industrialization of China and India, where people went from nothing per day to a little better than nothing per day: a huge increase in percentage terms.
To be fair, this doesn’t necessarily mean these folks are getting rich. As Milanovic points out, “Chinese and Indian GDP per capita has increased by 5.6 and 2.3 times, respectively, over the period… [but the] people around the global median are, however, still relatively poor by Western standards. This emerging ‘global middle class’ is composed of individuals with household per capita incomes of between 5 and 15 international dollars per day.” (Emphasis mine.)
The top 1% are also doing pretty well: that’s the nose of the elephant. If you were rich to begin with, you’ve gotten richer. But where the nose dips? The 75-90 mark? Those are basically poor people in rich countries.
Sure, if you’re on minimum wage in Poughkeepsie you’re better off than someone in Bombay pulling in less than 50 bucks a week. But your income is growing much more slowly than the rest of the world. In some cases it’s barely holding steady, and in some cases it’s actually going down in real terms.
This is the hollowing out of the middle class. This is the great decoupling of wages from productivity. This is the shift from labor to capital. And this is the source of a significant amount of global discontent.
But it’s also not the only reason we should be concerned.
This week, Futurism.comx reported that “137 million workers from five Southeast Asian countries are in danger of being replaced by automated systems in the next 20 years. The International Labour Organisation says that laborers working in the manufacturing industry, the garment industry most of all, are at the highest risk.”
These are the first manifestations of technological unemployment. The dip in the elephant’s nose is rolling down the line towards his tail. Soon his head will droop towards the floor. His shoulders and back will sag and his legs will splay. We are at risk of ending up with the equivalent of an elephant-skin rug, with only the tip of the nose -- the richest of the rich getting richer still -- still proudly shooting towards the sky.
I don’t know about you, but I’m terrified.