The wealth-to-salary ratio: a simple indicator of inequality
One number that predicts how unequal a country's wealth really is
A simple ratio—total wealth divided by average salary—strongly predicts inequality across real economies, just as economic models predicted. The finding holds most clearly in wealthy, developed nations, suggesting this single measure captures something fundamental about how wealth concentrates when investment income matters more than wages.
Policymakers and economists now have a straightforward diagnostic tool: if a country's wealth-to-salary ratio is rising, inequality is likely rising too. This could help governments spot growing inequality problems early and target interventions at the underlying imbalance between accumulated assets and labor income, rather than treating symptoms alone.