CHAPTER 1
Who Benefitted the Most from Globalization? Winner and Losers: Change in real income between 1988 and 2008 at various percentiles of global income distribution (calculated in 2005 international dollars) 90 80 70
Real Increase
60 50 40 30 20 10 0 5
15
25
35
45
55
65
75
85
95
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Note: The vertical axis shows the percentage change in real income, measured in constant international dollars. The horizontal axis shows the percentile position in the global income distribution. The percentile positions run from 5 to 95, in increments of five, while the top 5 percent is divided into two groups: the top 1 percent, and those between the 95th and 99th percentiles.
Source: Branko Milanovic, Global Income Inequality by the Numbers: In History and Now (Washington, DC: World Bank, 2012), http://www-wds.worldbank.org/external default/WDSContentServer/IW3P/IB/2012/11/06/000158349_20121106085546/Rendered/PDF/wps6259.pdf.
Winners: Certainly, this graphic shows that the top-fifth percentile has done very well, seeing incomes increase by up to 60 percent in the 1988-2008 period. But, it also shows that other income groups have done well. According to Branko Milanovic, “The bottom third, with the exception of the very poorest, became significantly better and many of (the) people there escaped absolute poverty.” The middle third also greatly benefitted, by approximately 3 percent per capita annually. All in all, the change in global income was huge: “It was probably the profoundest global reshuffle of people’s economic positions since the Industrial Revolution.” This combined group that escaped poverty are those known today as the global middle class. Losers: Besides those in extreme poverty who did not do well, there are other losers. The group below the top 5 percent, in the next 20-30 percentile, gained very little or saw stagnant incomes. These big losers are mostly made up of the US and European middle classes. “When asked by the World Values Survey to rate how democratically their country is being governed on a 10-point scale, a third of Americans now tend toward the end (of the spectrum)—‘not at all democratic.’”15 Since the early 1990s, these researchers found that “votes for populists have soared in most major Western democracies, whether the National Front in France or the People’s Party in Denmark.”16 The 15 Roberto Foa and Yascha Mounk, “Across the Globe, a Growing Disillusionment with Democracy,” New York Times, September 15, 2015, http://www.nytimes. com/2015/09/15/opinion/across-the-globe-a-growing-disillusionment-with-democracy.html?_r=0. 16 Ibid.
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