The elephant chart: What’s happening to world income levels and how it affects politics in the developed world

An interesting report broadcast June 29 on PBS NewsHour explained what some economists call the “Elephant Chart” because it looks a lot like the profile of an elephant facing to the right.

To read the chart, imagine every adult in the world lined up along the lower edge from left to right based on their disposable, after-tax income in 1988, the poorest on the left, the richest on the right. The height of the curve shows the percentage increase in income levels since then.

People in the U.S., Canada, Europe, and Japan are toward the right of the chart, where the elephant’s trunk dips down. What that means is that income levels for most people in the developed world have not been growing very fast. The very poorest people in the world haven’t seen much improvement either. But in the middle (for example in India and China) incomes are growing very rapidly, even if their absolute incomes are still well behind ours in the West.

Of course, the world’s richest, even after taxes, just keep getting richer.

The political implications are fairly obvious.

Here’s the report, which runs under seven minutes:


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