The
latest World
Inequality Report 2026
reveals the stark
cleavage between rich
and poor in the world –
a division that is
getting wider to the
extreme. Based on data
compiled by 200
researchers organised by
the World Inequality
Lab, the report finds
that fewer than 60,000
people – 0.001% of the
world’s population –
control three times as
much wealth as the
entire bottom half of
humanity.
In
2025, the top 10% of the
global population’s
income-earners earn more
than the remaining 90%,
while the poorest half
of the global population
captures less than 10%
of total global income.
Wealth – the value of
people’s assets – was
even more concentrated
than income, or earnings
from work and
investments, the report
found, with the richest
10% of the world’s
population owning 75% of
wealth and the bottom
half just 2%.
In
almost every region, the
top 1% was wealthier
than the bottom 90%
combined, the report
found, with wealth
inequality increasing
rapidly around the
world. “The result
is a world in which a
tiny minority commands
unprecedented
financial power, while
billions remain
excluded from even
basic economic
stability,” said
the report authors.
This
concentration is not
only persistent, but it
is also
accelerating. Since the
1990s, the wealth of
billionaires and
centi-millionaires has
grown at approximately
8% annually, nearly
twice the rate of growth
experienced by the
bottom half of the
population. The poorest
have made modest gains,
but these are
overshadowed by the
extraordinary
accumulation at the very
top. The share of global
wealth held by the top
0.001% has grown from
almost 4% in 1995 to
more than 6%, the report
said, while the wealth
of multimillionaires had
increased by about 8%
annually since the 1990s
– nearly twice the rate
of the bottom 50%.
Looking
beyond strict economic
inequality, the report
found that this
inequality fuels
inequality of outcomes,
with education spending
per child in Europe and
North America, for
example, more than 40
times that in
sub-Saharan Africa – a
gap roughly three times
greater than GDP per
capita.
And
inequality is creating
more greenhouse gas
emissions The report
shows the poorest half
of the global population
accounts for only 3% of
carbon emissions
associated with private
capital ownership, while
the wealthiest 10%
account for about 77% of
emissions.
Income
is distributed unequally
everywhere, with the top
10% consistently
capturing far more than
the bottom 50%. But when
it comes to wealth, the
concentration is even
more extreme. Across all
regions, the wealthiest
10% control well over
half of total wealth,
often leaving the bottom
half with only a tiny
fraction.
These
global averages conceal
enormous divides between
regions. The world is
split into clear income
tiers: high-income
regions such as North
America & Oceania
and Europe;
middle-income groups
including Russia &
Central Asia, East Asia,
and the Middle East
& North Africa; and
very populous regions
where average incomes
remain low, such as
Latin America, South
& Southeast Asia,
and Sub-Saharan Africa.
An
average person in North
America & Oceania
earns about 13 times
more than someone in
Sub-Saharan Africa and
three times more than
the global average. Put
differently, average
daily income in North
America & Oceania is
about €125, compared to
only €10 in Sub-Saharan
Africa. And these are
averages: within each
region, many people live
with far less.
About
1% of global GDP flows
from poorer to richer
countries each year
through net income
transfers associated
with high yields and low
interest payments on
rich-country
liabilities, it said –
almost three times the
amount of global
development aid.
Inequality is also
deeply embedded in the
global financial
system. Current
international financial
architecture is
structured in ways that
systematically generate
inequality. Countries
that issue reserve
currencies can
persistently borrow at
lower costs, lend at
higher rates, and
attract global savings.
By contrast, developing
countries face the
mirror image: expensive
debts, low-yield assets,
and a continuous outflow
of income
The
power of capital exerts
itself internationally
between nations.
Excluding countries with
a population of less
than 10 million, the ten
richest countries all
receive positive net
foreign income on their
capital. In contrast,
the world’s ten poorest
countries are former
colonies, most located
in Sub-Saharan Africa.
They display the
opposite trends compared
to the richest. Most of
these countries pay
significant net foreign
income to the rest of
the world. In other
words, these countries
are sending out more
money than they are
receiving from foreign
investments. This drain
limits their capacity to
invest in areas such as
infrastructure,
healthcare, and
education – key to
lifting them out of
poverty. No
wonder they can never
‘catch up’ and close
the gap with the
Global North.
Can
we do anything about
reducing inequality?
First, in a preface to
the report, the Nobel
prize-winning economist Joseph
Stiglitz repeated a
call for an
international panel
comparable to the UN’s
IPCC on climate change,
to “track
inequality worldwide
and provide objective,
evidence-based
recommendations”.
The authors of the
report then go on to
argue that inequalities
can be reduced through
public investment in
education and health and
by ‘effective’ taxation
and redistribution
programmes. It notes
that in many countries,
the ultra-rich escape
taxation. Tax havens
abound around the
world. A 3% global tax
on fewer than 100,000
centimillionaires and
billionaires would raise
$750bn a year – the
education budget of low
and middle-income
countries.
The
report proposes some
other policy measures.
One important avenue is
through public
investments in education
and health. Another path
is through
redistributive programs:
“cash transfers,
pensions, unemployment
benefits, and targeted
support for vulnerable
households can
directly shift
resources from the top
to the bottom of the
distribution.”
Tax policy is another
powerful lever:
introduce fairer tax
systems, where those at
the very top contribute
at higher rates through
progressive taxes.
Inequality can also be
reduced by reforming the
global financial system.
“Current arrangements
allow advanced
economies to borrow
cheaply and secure
steady inflows, while
developing economies
face costly
liabilities and
persistent outflows.”
Reforms here include
adopting a global
currency, with
centralized credit and
debit systems.
The
report shows that
redistributive transfers
do reduce inequality,
particularly when
systems are well
designed and
consistently applied. In
Europe and North America
& Oceania,
tax-and-transfer systems
consistently cut income
gaps by more than 30%.
Even in Latin America,
redistributive policies
introduced after the
1990s have made progress
in narrowing gaps. In
other words,
inequalities would be
even worse without such
measures.
But
the report recognises a
key problem. Effective
income tax rates have
climbed steadily for
most of the population,
but have fallen sharply
for billionaires and
centi-millionaires. The
elites pay
proportionally less than
most of the households
that earn much lower
incomes. This regressive
pattern deprives states
of resources for
essential investments in
education, healthcare,
and climate action. It
also undermines fairness
and social cohesion by
decreasing trust in the
tax system. The answer
of the authors is a turn
to progressive taxation
as it “not only
mobilizes revenues to
finance public goods
and reduce inequality,
but also strengthens
the legitimacy of
fiscal systems by
ensuring that those
with the greatest
means contribute their
fair share.”
To
summarise, the policy
answers offered in the
report are: 1)
monitoring inequality 2)
redistributing income
through progressive
taxation and social
transfers; 3) more
public investment in
education and health 4)
a global currency
system.
What
is missing here? There
is no policy to change
radically the
socio-economic structure
of the world economy –
in effect, capitalism is
to remain. The owners of
capital: the banks, the
energy companies, the
tech media companies,
big pharma, and their
billonaire owners – all
these are not to be
taken over. Instead, we
must just tax them more
and governments must use
the tax money to spend
on investing in social
needs. So the policy is
one of redistribution
of existing income and
wealth inequality, not pre-distribution
i.e changing the social
structure that engenders
these extreme
inequalities, namely the
private ownership of the
means of production.
In
previous studies I
have found that the
high inequality in
personal wealth is
closely correlated
with inequality in
incomes. I found
that there was a
positive correlation of
about 0.38 across the
data: so the higher the
inequality of personal
wealth in an economy,
the more likely that the
inequality of income
will be higher. Wealth
begets more wealth; more
wealth begets more
income. A very small
elite owns the means of
production and finance
and that is how they
usurp the lion’s share
and more of the wealth
and income. And wealth
concentration is really
about the ownership of
productive capital, the
means of production and
finance. It’s big
capital (finance and
business) that controls
the investment,
employment and financial
decisions of the world.
A dominant core of 147
firms through
interlocking stakes in
others together control
40% of the wealth in the
global network according
to the Swiss Institute
of Technology. A
total of 737 companies
control 80% of it all.
This
is the inequality that
matters for the
functioning of
capitalism – the
concentrated power of
capital. And because
inequality of wealth
stems from the
concentration of the
means of production and
finance in the hands of
a few; and because that
ownership structure
remains untouched, any
redistibutive policy
based on increased taxes
on wealth and income
will always fall short
of irreversibly changing
the distribution of
wealth and income in
modern societies.
At
this point, it is often
argued that public
ownership of finance and
key sectors of the major
economies of the world
is impossible and
utopian – it will never
happen short of some
popular revolution –
which in turn will never
happen. My reply would
be the adoption of
supposedly less radical
policies like
progressive taxation
and/or a step change in
public investment; or
global cooperation to
break the transfer of
value and income from
the Global South to the
rich elite in the Global
North, are
just as ‘utopian’.
What
G7 government in the
world is prepared to
adopt such policies?
None. How close have
they got to adopting the
report’s policies in the
last ten or 20 years?
Not close at all – on
the contrary,
governments have cut
taxes for the rich and
corporations and raised
them for the rest; while
public investment in
social needs has
declined. And
is there any global
cooperation on ending
exploitation by the
multi-nationals and
banks in the Global
South or in ending
fossil fuel production
and private jets?
The
authors of the report
say: “Inequality is
a political choice. It
is the result of our
policies,
institutions, and
governance
structures.” But
inequality is not the
result of “our”
policies, institutions
and governance
structures, but the
result of the private
ownership of capital and
governments dedicated to
sustaining that. If that
does not end, inequality
of income and wealth
globally and nationally
will remain and continue
to worsen.
