How do we know it’s inequality when we see it?
Well, of course, it can be measured in terms of income, or assets. But there are some societies where it’s much harder to get data. Take the Middle East, for example, where you’re relying on household surveys to get data: the wealthiest 1% don’t respond to these surveys. So you’re actually missing an important group here, and probably under representing inequality! Similarly, asset ownership data is really hard to come by, real estate and other things like this, which is where the super-rich stick their money – and these aren't included in income measures either. So that’s another side of inequality that we’re missing.
But another point on identifying inequality is that people are perceiving inequality to be on the rise, they perceive social mobility prospects to be lower. It’s obviously not just a perception thing: wages have stagnated, quality of education has dropped, there are few jobs, and so forth. But if you look at the Middle East, we can see from the World Values Survey that people perceive their prospects to be declining. Take Egypt’s middle class, in the early 2000s they classified themselves as upper income, but by the late 2000s they started classifying themselves as lower income. In a region like the Middle East, where they don’t have very articulated welfare systems -- pensions, unemployment insurance -- so your biggest ticket out of instability is a public sector job – and there’s stagnation there, and the private sector is not rising to replace those jobs. So, identifying inequality is also social mobility prospects.
