Wednesday, September 07, 2011

Gini index

The United Nations measure the Gini index as the ratio of the average income of the top 10% (richest) compared to the bottom 20% (poorest) in the country. A higher index shows a bigger inequality of income. Here are the findings:

High income countries
Japan            24.9
Germany       28.3
Canada         32.6
France          32.7
Australia       35.2
UK               36.0
Israel             39.2
USA             40.8
Singapore      42.5
Hong Kong   43.4

Low income countries
Indonesia       34.3
Russia            39.9
China             46.9

We have seen unrest in China and Israel about the high cost of living. Both countries have high Gini index. I have included Australia and Canada as these countries are rated to provide a good standard of life for their people.

America is considered to have high income inequality. Singapore is worse than America.

Source: http://en.wikipedia.org/wiki/List_of_countries_by_income_equality

4 comments:

johnmagfam said...

Rightly, Gini index of Singapore should be the KPI for all our top leaders.
What is your view?? Pls expand on this topic!

michael13 said...

Most of the governments prefer to blame it on the effects of globalisation. In fact, lack of political will is one of the main reasons that the problem of high Gini index remains unresolved. Many of our government's policies aggravate the situation and largely contribute to the high score of 42.5 which among others, is severely divided our society and it is now threatening the mere survival as a nation.

Tan Kin Lian said...

@Johnmagfam
I like a combination of the per capital income and the Gini index. Maybe 50% weightage for each factor.

@michael13
Spot on. It is the lack of political will. It is possible to have a lower Gini index by adopting certain government policy, such as minimum wage, unemployment insurance. While it has some negative impact (e.g. encourage people to be lazy), it is more than offset by the positive impacts.

michael13 said...

Agreed, Mr Tan. However, to do the right things and to ensure our society is NOT divided by big inequality of income, we need some good quality of politicians to be in the power of positions. Regrettably, such quality of politicians are hard to come by nowadays. Most of them choose to run the country in a smart way. Word of 'Wisdom' cannot be found in their dictionaries. Greed has taken full control of the situation in many places. To them, service is equal to money. Sad to acknowledge this cruel reality!

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