Rising Capital Returns Deepen Global Inequality as Labour’s Share Shrinks
Global data from 1990 to 2024 show a clear and persistent rise in the share of national income accruing to capital owners, widening the wealth gap between the rich and the working population. According to the findings, 56% of countries experienced an increase in capital’s share of income, reflecting faster growth in returns from assets such as real estate, financial investments, and corporate profits compared to wages. In many economies, labour income has stagnated despite gains in productivity, leaving workers with a shrinking portion of national wealth. The trend is particularly pronounced in advanced economies with highly financialised sectors, though emerging economies are catching up. Rising automation, weakening labour unions, and global competition have further eroded workers’ bargaining power. As inequality deepens, economists warn of long-term consequences, including declining social mobility and political instability, urging governments to reform tax policies, boost labour protections, and promote equitable economic growth.
