Index of Inequality?

On May 28, 2013, The Economist published a graphic supporting my idea of opening "income scissors," i.e., widening income gaps in the "Western World." The chart below presents what the editors term the better-life index. It should give a closer indication of the well-being of people than the Gross Domestic Product (GDP) generally used when classifying the wealth of countries.

Better-life index (©The Economist)

The Organization for Economic Co-operation and Development (OECD) has assembled several indicators in various countries over the last three years, like regular jobs, unemployment, personal income, housing, education, environment, satisfaction in life, safety, and civic life engagement. The Economist then took the rough data considering how the upper 10% and the lower 10% of the people for income and education fare in a given society.

I still remember the years after the war when Germany might have figured around an absolute better-life index of 0.4. However, it is not the total value that intrigues me but the gap between the upper 10% and the lower 10% concerning their socioeconomic status. This must have been much lower than 0.1 in Germany when I was young.

As a student, I recognized a different world during my frequent trips to Italy. I noticed enormous differences in the lifestyle of high-society and poor people. Today Italy figures on the chart of the better-life index somewhere in the middle, the gap between the two poles being only around 0.17.

Will he haunt the capitalistic world afresh?

The US is on top, but the gap opening for its better-life index is wide, about 0.24. Germany's absolute index is lower than that of the States (remember, Germans always complain!), but the gap between the upper 10 % and the lower 10 % is 0.21, nearly as wide as for the US.

I want to single out two countries showing small gaps around 0.11. One is Japan, a country where I worked in 1986 for three months. Japan is a traditionally homogeneous society where the less fortunate people do not consider themselves much worse off than their wealthier country fellows.

The other place I just visited is Poland, a country on the move, trying to find its way in Europe between traditionalism and an open western society. Polish people think high, and those at the lower end have not given up their hopes for a higher, better-life index shortly. The question is, will we see an increase in the gap in Poland over the coming years?

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