Much has been made recently about the income inequality in the U.S. and the trend for this inequality to worsen. This new story from the Economist documents the trend. What surprised me in the story is that income inequality in China is also increasing.
The Gini Coefficient measures the inequality in a distribution, with 1 being a completely concentrated distribution and 0 representing total equality. The U.S. Gini Coefficient increased from .34 to .38 in the twenty years 1985-2005. China's coefficient has increased from .28 to .40 in the same period. Brazil's Coefficient declined in the same period from a comparatively high .59 to .55.
In looking at China one could speculate that an elite is capturing a bigger share of income. Private business owners are definitely becoming an increasingly important part of the economy, which would also explain the trend for greater income concentration. I think this trend toward income concentration in China bears watching as a possible leading indicator of social unrest in China.
