Can a Honduran have what a

Norwegian has? Equal pay for

all countries: an exploration
by
Jur Schuurman
Is Inequality Real?
• Massive Demonstration is Chile and Colombia 2019
• French Yellow waist movement 2018
• Migration from Poor to Richer countries
• Oxfam reports
• United Nations : Sustainable Development Goals (#10) is about Inequality
• Not just out of moral concerns, but also because of inequality’s negative
impact on economic and human development, as Stiglitz (2016) has
argued
• Amartya Sen (1999) says about the expansion of freedom, inequality
reduction is both the primary end and the principal means of
development.
A matter of Distributive Justice
• We Can concentrate at individual level
• And these are not going away, or at best very slowly, as is argued in the 2018 World Inequality
Report: “While the global top 1% income share increased from 16% in 1980 to 22% in 2000, it
declined slightly thereafter to 20%. The income share of the global bottom 50% has oscillated
around 9% since 1980” (Alvaredo et al. 2017), the main cause for said decline being the
substantial economic growth experienced by India and China (Milanovic 2013).
• What would worldwide equal pay concretely mean? Te answer is relatively straightforward: taking
2019 estimations for both world GDP (US$88,081 billion—World Population Review 2019) and
the J. Schuurman 205 economically active portion of world population1 (68.7% of 7.7 billion, that
is, 5.29 billion—Population Pyramids of the World 2019), the world average GDP per capita (taken
here as a proxy for pay or income) in 2019 can be estimated at US$16,650.
• Tat is, at the present level of world GDP, “equal pay on a global scale” would ensure a decent life
for all— contrary to the current unequal distribution that leaves 700 million people in extreme
poverty. In other words, theoretically it is possible to “leave no one behind”, to quote the UN
slogan for the Sustainable Development Goals.
Possible Problem as per the author
• First, while it is true that many arguments against greater equality are
ideological and serve the interests of those that wield them (Piketty
2019)
• some income inequality might be inevitable in a socioeconomic
system based on (incentives for) innovation
• A second reason is that we must distinguish between income
inequality and wealth inequality
• And fnally, “equal pay for all adults”, seems to be the perfect recipe
for a bureaucratic nightmare, especially on a worldwide scale.
So What to do?
• Thus, “equal pay for all economically active people in the world” is a non-
starter. Time for a second leap in scale
• Having first gone global, we now change the unit of analysis and look at
inequality not between individuals but between societies—nation states,
to be precise.
• Te abovementioned objections against “equal pay for all individuals in the
world” are not the only reason to do this: it is undisputed that “the bulk of
global income inequality today is accounted for by income gaps between
countries, rather than within them” (Rodrik 2017).
• Or, as Milanovic (2016) Equal Pay… 206 puts it, “location” is a more
important determinant of inequality than class.
Is it better to change the scale?
• he counter argument of inequality as a condition for stimulating
innovation does not apply between countries
• Whether “equal pay per capita for all countries” is feasible is another
question, but at least it seems more realistic than global equal pay for
individuals: bureaucratic and administrative problems will be less
serious since it is easier to deal with some 190 units of analysis
(countries) instead of 5.29 billion. For instance, progress toward the
goal should be much easier to monitor.
• Tis “international inequality”, as we will call it henceforth, will not
accurately refect the global income distribution among individuals,4
but since our focus is precisely the (in)equality between nations, that
need not concern us.
• A good indicator for average income is the GDP per capita (in 2011
international dollars), as given in the International Monetary Fund’s
World Economic Outlook (International Monetary Fund 2019). It is
true that average income and GDP per capita are diferent fgures, but
the latter is a good proxy for well-being, particularly since Rosling
(2012) has shown that GDP/capita correlates strongly with Human
Development scores
The Global Wall of Inequality
Does Inequality exists globally?
(GDP a good indicator of human development)

• Te October 2019 fgures for 191 countries, from less than US$800 in
Burundi to over US$116,000 in Qatar, can be consulted in the
Appendix (Table 13.1) and are visualized in Fig. 13.1, showing that the
distribution of countries according to their GDP/capita is quite
skewed: the median is situated at US$12,243 (Egypt), far below the
average between the highest and the lowest fgure (US$58,000).
• Gini Index is frequently chosen, with a value of 0 for total equality (all
subjects receive the same income) and of 1 for extreme inequality
(one subject earns everything, all others nothing). Applying the Index
to the above distribution,5 the resulting score is 0.525, meaning that
international inequality is high: within countries, a Gini of 0.525 or
more occurs in only 10 nation states (World Bank 2017)
So how to deal with this situation
• Three principles on which we may build our ethical framework
1. Equality
2. Equity
3. Need
• Statist (Minimalist position)
• Cosmopolitan position (There is no fundamental reason why
Honduras and Burundi should not be places where it is just as
pleasant to live as Norway or the Netherlands)
• John Rawls Veil of Ignorance.
• “Concept 1 inequality” accounts for the lion’s share of global income
inequality. As Roser (2019) expresses it: “Today’s global inequality of
opportunity means that what matters most for your living conditions is the
good or bad luck of your place of birth”. He is right: one’s place of birth
matters, it matters a great deal. If it would cease to do so, that would not
mean that inequality between individuals is eradicated, but the extreme
poverty that is now the clearest expression of global inequality would
disappear, since the average income level in any country (say, US$16,650
before taxes—see above) would be more likely to prevent that. Also, the
evolution of this international inequality would be much easier to monitor
than inequality between individuals, more easily allowing for proposals to
adjust policies and mechanisms.
Solutions
Do not throw away the child with the bathwater
• Dutch environmental lobbyist Wouter van Dieren used the formula
(I=P × W × T): environmental Impact equals Population times Wellbeing
times Technology. For the advocates of growth, the T is the factor that
reduces the total product P × W × T: new technologies (think of wind
energy, electrical cars etc.) make the I smaller, so that P × W has room to
increase. But according to Van Dieren, T will not be able to keep up with
P × W. Te technology solution is not inexhaustible: there is an “inherent
limit” to the catching up that India and China are doing.
1. Migration
2. FDI
3. World Government, UN development goals
1. Activism, advocacy, commitment
The Case of African
• https://www.youtube.com/watch?v=AfnruW7yERA