The global top 1 percent earned twice as much as the bottom 50 percent in recent years

Behold, the “elephant chart.” It’s one of the most famous charts in economics of the past decade, one that aims to summarize the state of the world economy in the post-Cold War era:

Elephant chartGraph by Branko Milanovic/Christoph Lakner; elephant added by Caroline Freund

Using World Bank data from researchers Christoph Lakner and Branko Milanovic, the chart shows how each part of the world’s income distribution fared from 1988 to 2008. There are two big winners: the global middle class, in particular people in East Asia (especially China) and South Asia (especially India), and some parts of sub-Saharan Africa who’ve escaped extreme poverty in recent decades; and the ultrarich, who are overwhelmingly concentrated in rich countries in Europe or North America.

By contrast, people from the 80th-90th percentiles of the distribution experienced sluggish growth, if any, and the absolute poorest people didn’t see incomes grow as fast as their slightly richer neighbors.

The elephant chart went viral after Lakner and Milanovic first published it in a working paper back in 2013 (here’s the published version). There’s been some debate about whom, exactly, the dip at the 80th-90th percentiles represents — Lakner and Milanovic argue it includes many lower- and middle-class people in rich countries like the US and Germany, while others argue it’s mostly showing a stagnant Japan and struggling post-Soviet economies — but the broad implication, that the bulk of humanity and the top 1 percent both gained while a somewhat richer cluster fell behind, is clear and powerful.

The data for the chart stops at 2008. But a team of economists — led by Facundo Alvaredo, Lucas Chancel, and famous inequality research trio Thomas Piketty, Emmanuel Saez, and Gabriel Zucman — recently unveiled the 2018 World Inequality Report, which extends the data to 2016. They replicated the elephant chart.

– Vox

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