Study shows rapid increase in Indian inequality during boom years

If you want to be confused, ask an economist in India to define the so-called emerging middle class.  Then ask the man on the street.  If you're a statistician, you can be "middle class" and still not have much to show for it, it turns out.

Until the numbers come out, that is.

In a great explainer for the Globe and Mail, Stephanie Nolen writes that the new Organization for Economic Cooperation and Development report on inequality around the world "found that inequality in earnings has worsened sharply in the country over the past 20 years, and is worst here of any emerging economy."

The report says that the top 10 per cent of Indian wage earners now make 12 times more than the bottom 10 per cent, up from a ratio of six times more in the 1990s. And while much is made here of the “emerging middle class,” the report holds statistics that put hard numbers to what being a middle-income earner really means: The top 10 per cent of earners make almost five times more than the median 10 per cent; the median earns just 0.4 times more than the bottom 10 per cent.

Interestingly, the OECD blames a bugbear that I've been skewering for awhile now — the continued dominance of the so-called "unorganized sector".  Because India still has measures in place to support cottage industries (a very positive spin), most people aren't getting the legal minimum wage, health benefits, or any of the trickle down from the new boom.  Meanwhile, as I wrote in my pieces on the shortage of skilled labor, the resurgence of trade unionism, and the flap over foreign investment in retail, the government appears to be committed to continuing to prop up the sweatshop economy.