Inequalities in Income: India and World

A global report by the UN arm International Labour Organisation (ILO) which covered 189 countries makes the following observations:

  • The top 10 per cent earners made a little under half of the total income of 2017, whereas the lowest-paid 30 per cent of workers earned less than 2 per cent.
  • On average, the bottom 10 per cent workers earned $22 a month in 2017 while the top decile earned $7,475.
  • The poorest 10 per cent would need to work three centuries more if they were to reach the $7,475 level of the top decile.
  • The income share of the richest 20 per cent workers came down by 6.8 percentage points whereas the income share of the middle 60 per cent workers grew to 30.2 per cent in 2017 from 23.6 per cent in 2004.

Trends in India

  • The top 10 per cent earners in India made over 69 per cent of India’s labour income in 2017 whereas the bottom 10 per cent earners earned a mere 0.25 per cent.
  • This gap has been consistent in India since 2004. Then the top decile had earned about 70 per cent of the total income and the poorest 10 per cent had earned 0.30 per cent.
  • The pay inequality has it has reduced at the global workplace in the last 13 years whereas it remained consistent in India.

The income share of the richest 10 per cent across the globe was down to 48.9 per cent in 2017 from 55.5 per cent in 2004. The report has attributed this income inequality to the rise of emerging markets such as China and India as the pay inequality in these countries is more pronounced. China’s 10 per cent richest workers earned 42.12 per cent of its labour income against the bottom decile’s 0.47 per cent in 2017.

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