I Dream of Gini Index 00.00
by Hank Pellissier
Many people want nuclear disarmament; others hope for reduced carbon emissions, free education, affordable pharmaceuticals, or improved democracy.
The Gini Index, aka Gini coefficient or Gini ratio, is a formula designed by Italian statistician Corrado Gini that calculates inequality of income and wealth. If a nation has a low Gini number, it signifies that all the citizens have nearly the same wealth or income; if a nation has a high number, it indicates a giant gap between rich and poor.
Worldwide, the 2022 Gini numbers range from less than 26.00 (Slovenia, Czech Republic, Slovakia, Belarus, Moldavia) to higher than 57 (South Africa, Namibia, Suriname, Zambia). Rags-or-riches USA is a miserable 41.4 - as brutally stratified as Haiti and Ivory Coast, and worse than India, China, or Russia.
Of course, even Slovenia (24.6) is long way from 00.00 - equal income for all. That’s a pity, because “Global Egalitarianism” - Gini 00.00 everywhere - would possibly make humanity happier, healthier, and free of the social ills that plague the world today. If 00.00 seems unreasonable - humanity could at least aim for 10.00 or 20.00
Why would this be beneficial? Observe the list of “World’s Happiest Nations” Notice? They all have lowish Gini indexes. Finland (27.4) Denmark (28.7) Iceland (26.1), Netherlands (28.5) Norway (27) Sweden (28.8) Switzerland (32.7). Conversely, the Most Unhappy Nations are consistently High Gini: Malawi 44.7. Lesotho 44.9 Botswana 53.3 Rwanda 43.7 Zimbabwe 50.3
Lower the Gini; Lift up the Joy!
What’s the connection? Research studies reveal societal problems decrease if the gap between rich and poor is narrowed. Crime, for example. A 2020 study of sixteen nations revealed “Income inequality… increases crime rate… property crime should be restricted by… judicious income distribution… [and] generating employment opportunities….”
Additionally, “societies with a strong middle class experience higher levels of social trust… better educational outcomes… better health outcomes and higher life satisfaction,” claims a 2019 report from the Organization for Economic Cooperation and Development (OECD). (Obviously, a nation with without rich or poor, would be 100% middle class.)
How a nation can lower its Gini?
One strategy seems obvious: Raise the Minimum Wage. Multiple nations have done this; here’s the 9 highest minimum wages in the world, with their corresponding Gini scores: Australia (34.4), Luxembourg (28.4), New Zealand (36.6), Ireland (31.4), France (32.4), United Kingdom (35.1), Netherlands (28.1), Belgium (27.2), Germany (31.9).
Another logical step is lowering the maximum salary, but very few nations have tried this. In 2014, Egypt placed a maximum cap of $6,000 month on its state-owned banking management (hundreds resigned in protest). Switzerland failed to pass a referendum in 2013 that would have established at 12:1 ratio between highest and lowest-paid, and Jeremy Corbyn briefly suggested a 20:1 CEO-worker ratio in the UK, that polled favorably with the public.
The best example is Cuba’s 4.55:1 ratio, where the maximum salary is $396/month and the minimum is $87/month. These low numbers are incomprehensible to larger economies, so here’s my suggestion: I’d like at least a 3:1 ratio - in the USA I propose $67,000 annual minimum and $201,000 maximum, i.e., $32/hour - $96/hour.
Why is Slovenia the world’s lowest Gini? Multiple factors contribute: government childcare, parental-leave provisions, and women's employment are, plus it has good quality public healthcare, strong funding for education, supportive labor laws and social assistance to the elderly, people with disabilities, and special needs. Taxation is progressive; between EUR 20,400 and EUR 48,000 is taxed 34%; between EUR 48,000 and EUR 70,907.20 tax is 39%, and income above EUR 70,907.20 is taxed 50%. Plus, there is a VAT (value-added tax) of 22%, with a lower rate of 9.5% for certain goods and services.
Is Gini 00.00 “unnatural”? Are humans cognitively opposed to sharing? I don’t think so. Siblings, and nursery school children in the crucial years 0-5, are repeatedly encouraged to share their toys; it’s generally the most emphasized skill to learn at that age. Unfortunately, sharing is far less promoted in older humans; instead, it is aggressively replaced by “winning” - academically, socially, athletically - and it’s near-cousin GREED.
Has there ever been an economically egalitarian society? Recent research in The Dawn of Everything: A New History of Humanity by anarchist anthropologist David Graeber and his colleague David Wengrow, believes our current 1% vs. 99% scenario is an anomaly in homo sapiens history. Resources, they claim, were not only shared in hunter-gatherer societies, but throughout history and in every corner of the planet, even in densely urban civilizations, and frequently, the book notes, in pre-Columbian American groups, like the Inca Empire, “a kind of utopian, socialist experiment where everything got redistributed.” Capitalism, with its predatory habits, is a relatively new concept that has not only enveloped economics; it’s become a dominant ideology. I want poverty alleviation and the extinction of avaricious, needless competition. I am waiting for the rise of altruism and the elevation of generosity and social peace.
I want Gini 00.00 - Do you?