Incomes flat or falling for two-thirds of households in advanced economies

New research from the McKinsey Global Institute has found that, in the last 10 years, wages have fallen or stagnated for nearly 70 percent of people in developed countries. If the trends continue, around half a billion people will grow up to be poorer than their parents.

In some countries, welfare payments and tax cuts have partly offset the impact of falling wages. Yet a quarter of households have only the same amount of money similar households had in 2005, or even less. In the preceding decade, only 2 percent of households were in this situation.

Another report, The wealth of the nation, recently published by the Evatt Foundation think tank, found that, while Australia’s wealth has increased substantially since 1970 and it is now commonly listed among the world’s wealthiest countries per capita, inequality is greater than it was, and the gap is widening.

Much of the coverage of inequality and disadvantage focuses on the potential for social instability. The McKinsey report, for example, notes, “[A] significant number of those whose incomes have not been advancing are losing faith in aspects of the global economic system”.

Instability and loss of faith, if channelled into class struggle and a fight for wealth redistribution, would be the best chance workers have to defend their living conditions the world over.