project-syndicate | We are living in the Dark Ages of inequality statistics. More than a
decade after the “Great Recession,” governments are still unable to
track accurately the evolution of income and wealth. Statistical
agencies produce income-growth statistics for the population as a whole
(national accounts), but not for the “middle class,” the “working
class,” or the richest 1% and 0.1%. At a time when Google, Facebook,
Visa, Mastercard, and other multinational corporations know intimate
details about our private lives, governments still do not capture, let
alone publish, the most basic statistics concerning the distribution of
income and wealth.
This failure has huge costs for society. The perception that
inequalities are reaching unjustifiable heights in many countries,
combined with a lack of any possible informed choice for voters, is
fodder for demagogues and critics of democracy.
Making matters worse,
experts in the field of inequality are sometimes depicted as being
overly reliant on specific methodological approaches, as illustrated in The Economist’s recent cover story,
“Inequality illusions.” But, of course, data in the social sciences are
by their very nature open to challenge, which makes methodological
debates largely unavoidable. The question is where to draw the line
between legitimate academic disagreement about inequality levels and
trends and outright inequality denialism.
Whether or not inequality is acceptable – and whether or not something
should be done about it – is a matter of collective choice. To help
inform the debate, more than 100 researchers from around the world have
joined forces to develop innovative methods for compiling inequality
statistics through the World Inequality Database,
which now covers more than 100 countries. The WID includes the widest
possible array of available data sources, from household surveys,
tax-administration data, national accounts, and wealth rankings
published in the media, to the “Panama Papers,”
through which the International Consortium of Investigative Journalists
exposed stockpiles of wealth stashed in various tax havens.
