Lecture: Global Inequality
Lecture script · about 15–20 minutes spoken · Week 9
Opening
Picture three people. A shopper is reading the label inside a shirt. A nursing student is wondering why life spans differ so much from country to country. A business major is weighing a job with a company that makes things overseas. Each of them is running into the same ideas: how the world's countries are ranked, where a poverty line is drawn, and which story best explains the gaps.
In Week 7, you met stratification, the ranking of people into layers inside one society, along with the median and absolute poverty. In Week 2 you learned to ask four questions of any figure, and Week 8 added the habit of naming the level of analysis. In this lecture I want to take the layers across borders. We'll see the world's layers, measure development, draw the world's poverty line, weigh three explanations for the gaps, follow one shirt through a factory, and then read real figures on inequality inside seven countries. Next week, in Week 10, the course turns to race and ethnicity.
Let's start with two babies born on the same morning.
1. See the world's layers
Picture two newborns arriving on the same morning in two different countries. One goes home to a house with running water and a clinic down the street. The other goes home to a village where the nearest clinic is a day's walk away. Neither baby earned its starting place. The layers were there first.
That's the first idea. Global stratification is the ranking of the world's countries into layers by wealth, power, and well-being, the same kind of layering found inside one society drawn across the whole world.
To rank countries, you need one yardstick every country reports. The World Bank uses GNI per capita: a country's gross national income divided by the number of people who live there, an average in dollars per person per year that says nothing about how the income is shared. Then it sorts countries into an income group, one of four classes: low, lower-middle, upper-middle, and high income. The dollar thresholds are reset once a year.
For fiscal year 2027, on 2025 data, a low-income country has GNI per capita of 1,175 dollars or less. A high-income country is above 14,375 dollars. The two middle groups fill the space between, and the upper-middle band runs from 4,636 to 14,375 dollars. Put the top threshold beside the low-income ceiling and the top one is more than 12 times as high.
Here's an illustrative country. Its gross national income is 50,000,000,000 dollars, and it has 10,000,000 people. Divide the total by the people and you get 5,000 dollars per person. That puts it in the upper-middle group.
One warning before we move on. An income group labels a country, not a person. A country can be classified as high income while many of its people live on far less. And the four groups are bands on one yardstick, not stops on one road.
Pause and try this. A country's GNI per capita is 5,000 dollars. Does that tell you what a typical resident earns?
Think about what kind of number GNI per capita is.
Here's the answer. No. It's an average, a total divided by a head count, and it classifies the country without telling you how the income is shared.
2. Measure development
Let me show you why that warning matters. Picture two illustrative villages of five households each. In the first, every household earns 6,000 dollars a year. In the second, four households earn 2,000 dollars each and one earns 22,000 dollars.
Add them up. The first village has 30,000 dollars in total. The second also has 30,000 dollars in total. Divide each by five households and both come out at 6,000 dollars per household. Same average. But line up the second village and the middle household earns 2,000 dollars, a third as much. An average can hide deep poverty beside one large income.
The national yardsticks have that same weakness. GDP per capita is a country's gross domestic product, the value of everything produced inside its borders in a year, divided by its population; an average that hides how the output is shared. GNI counts the income a country's residents earn, and GDP counts what's produced inside the borders. Both are a total divided by a head count.
So sociologists also measure development directly. Life expectancy is the number of years a newborn would live on average if the death rates of the present day held for its whole life. Years of schooling is the amount of formal education people in a country receive, counted in years. And the Human Development Index, the HDI, is a composite score that combines life expectancy, years of schooling, and income per person into one number, so countries can be ranked on more than income alone.
Here's an analogy. A composite score is like a recipe. Change the ingredients, or how much of each goes in, and you get a different dish. Change what an index counts, and a ranking can change too.
Pause and try this. In the second village, which number better describes the household in the middle: the average of 6,000 dollars or the median of 2,000 dollars?
Picture the five households lined up from lowest to highest.
Here's the answer. The median of 2,000 dollars. One large income pulled the average up and left the middle household far below it.
3. Draw the line
In Week 7, absolute poverty meant lacking the basics needed to live. To count it across the whole world, someone has to choose one amount of money that marks "too little to live on." That amount is a line, and a line is a choice.
Extreme poverty is living on less than the International Poverty Line, the World Bank's threshold for the lowest level of income or consumption used to count the world's poorest people. In 2025 the World Bank raised the International Poverty Line to 3.00 dollars a day in 2021 international prices. The old line was 2.15 dollars a day in 2017 prices.
Notice the price years. The two lines are stated in different years' prices, so subtracting one from the other isn't a fair measure of the change. That's Week 7's dollar year again.
Under the new line, about 817,000,000 people, roughly one in ten, lived in extreme poverty in 2024. That estimate is about 125,000,000 higher than under the old line. So the old line would have counted about 692,000,000 people. And here's the key: the rise came from moving the line, not from falling incomes. The same people, with the same incomes, were counted differently because the definition changed.
There's a second story in the same data, and it points the other way. Over the long run, the share of the world's people in extreme poverty has fallen from about one in every two or three to about one in ten. Both statements are true at once. One is about a definition; the other is the finding.
Pause and try this. Under the new line the count went up by about 125,000,000 people. Did that many people become poorer?
Ask yourself what changed: the people, or the line.
Here's the answer. No. The line moved up, so more people fell below it by definition. A poverty line is a definition, not a fact of nature.
4. The first explanation: modernization theory
Picture a small farm town that gets a rail line, then a mill, then a school. Over two generations, farm work gives way to factory work. One story about the world's layers says every poor country can take a road like that.
That story is modernization theory: the view, associated with Rostow's 1960 book The Stages of Economic Growth, that low-income countries can develop through stages of industrialization and cultural change. In this view, poverty is mostly a late start. Investment, new technology, and new habits move a country up the stages.
The critique matters as much as the theory. Critics call modernization theory ethnocentric. You met that word in Week 3: judging another culture by your own culture's standards. Here it means assuming the West's road is the only road, and treating every low-income country as an earlier version of a rich one.
I want to be careful here. Modernization theory isn't the right answer, and it isn't the discredited one. It's a perspective with evidence and critics, like the two that come next. Your job is to state it at full strength and then state the critique at full strength.
Pause and try this. A report says, "This country is poor because it hasn't yet built enough factories or schools." Which theory is that report speaking for?
Ask where the report puts the cause.
Here's the answer. Modernization theory. It places the cause inside the country, in steps it hasn't yet taken, and a critic would ask whether one road fits every country.
5. Dependency and world systems
Now stand at the other end of that rail line. The town ships raw cotton to a distant city that spins it, sews it, brands it, and sells it back at a far higher price. Most of the money stays where the brand lives.
That's where the second story starts. Dependency theory is the view that wealthy core nations prosper by drawing resources from poorer nations, so the poverty of the poorer nations is produced by the relationship between them rather than by a late start. Modernization theory looks inside a poor country. Dependency theory looks at the tie between countries.
The third story widens the lens to the whole world economy. World-systems theory is Wallerstein's account, from his 1974 book The Modern World-System, of one world economy whose countries hold core, semi-periphery, or periphery positions in a global division of labor. Core nations are the wealthy, industrialized countries at the center that gain the most from the world economy's exchanges. The periphery is the poorest countries, which mostly supply raw materials and low-paid labor. And the semi-periphery sits between, drawn on by the core while it draws on the periphery.
Here's a way to hold the difference. Dependency theory has two sides, richer and poorer. World-systems theory has three positions, with a middle tier. And "periphery" is a position in the world economy, not a spot on the edge of a map.
Pause and try this. A country assembles goods from imported parts for richer markets, while buying raw materials from poorer countries. In world-systems theory, which position does it hold?
Count the directions it trades in.
Here's the answer. The semi-periphery. It's drawn on by the core while it draws on the periphery, which is the middle position.
6. Follow the shirt
Go back to that shirt label. The cotton may have been grown in one country, spun in a second, sewn in a third, and sold in a fourth. That's globalization: the growing flow of goods, money, people, and ideas across national borders, which ties distant economies and societies more closely together. The brand on the label is often a multinational corporation, a company that owns or controls production, offices, or sales in more than one country while keeping its headquarters in one home country. Size isn't the test. Operating in more than one country is.
Now take one illustrative garment factory that sews shirts for a brand based in another country. Run it through the three theories.
Modernization theory reads the factory as an early stage of industrialization. It brings wages, skills, and new work habits, a first step toward better-paid industry. Dependency theory reads it as value drawn from a poorer nation to a richer one. The brand keeps most of the shirt's price. World-systems theory reads it as one link in a chain that runs from the periphery to the core, with cotton, sewing, and design each sitting in a different position.
One factory, three stories, and they disagree about whether it's a ladder or a drain. The course gives no verdict. The evidence about a real factory is where you weigh them.
Our three perspectives can read it too. Structural functionalism, at the macro level, asks what job the factory does for the economy. Conflict theory, also macro, asks who gains the most from the shirt's price. Symbolic interactionism, at the micro level, asks what the work means to the people who do it, and what the label means to the shopper who reads it.
Pause and try this. Which theory reads the factory as one link in a chain from the periphery to the core?
Think about which theory uses the word "periphery."
Here's the answer. World-systems theory. Core and periphery are its position words, and it treats the whole chain as one world economy.
7. Read the figures four ways
Last, real figures. Picture a pizza cut among ten friends. If everyone gets the same slice, the split is perfectly equal. If one friend takes the whole pizza, it's perfectly unequal. The Gini index is a measure of how unequally income or consumption is spread across a population, read on a 0-to-100 scale where 0 would mean everyone has the same and 100 would mean one household has everything.
The World Bank Poverty and Inequality Platform publishes the index on a 0-to-1 scale, and Our World in Data presents the series. So a value read as 0.417 becomes 41.7 once you multiply by 100. For 2022, seven countries line up like this from lowest to highest. Slovakia is 24.1. Norway is 26.9. Sweden is 31.6. Germany is 33.7. The United States is 41.7. Brazil is 51.9. And South Africa is 54.1.
Now the four questions. What's measured? How unequally income or consumption is spread across a country's households. Over whom? Households in seven countries, each from a survey the platform dates to 2022. What does it show? The widest gap, South Africa minus Slovakia, is 30.0 points. The United States minus Norway is 14.8 points. And the middle of the seven, the median, is Germany at 33.7. Notice the unit: points on the 0-to-100 scale, not percentage points, because a Gini value isn't a percentage.
What doesn't it show? A Gini value says how spread out incomes are, not how high they are. There's a caveat to say aloud, too. High-income countries' figures measure income after taxes and benefits, while most low- and middle-income countries' figures use a consumption measure, what households spend on and use. So you compare with care. Correlation or cause? Neither. These are descriptions of survey estimates for a named year.
One more pattern. Across the world, richer countries tend to have longer lives. That's a correlation, and it doesn't say which way the arrow runs. Higher income may support health, through clinics and clean water. Better health may support income, because healthy people can work and learn. And other conditions may shape both at once.
Pause and try this. Norway's Gini value is 26.9 and the United States' is 41.7. Does that tell you which country is richer?
Ask whether a Gini value measures spread or level.
Here's the answer. No. A Gini value measures how spread out incomes are, not how high they are, so it says the United States' incomes were more unequally spread, and nothing about which country is richer.
Closing
Let me pull it together. Global stratification ranks countries the way stratification ranks households, and an income group labels a country, not a person. GNI and GDP per capita are averages that hide how income is shared, so life expectancy, years of schooling, and the HDI measure development directly. The poverty line is 3.00 dollars a day in 2021 prices, and moving it moved the count. Modernization theory looks inside a country, and critics call it ethnocentric. Dependency theory looks at the tie between richer and poorer nations, and world-systems theory adds the semi-periphery. One garment factory supports all three readings. And a Gini value measures spread, not level, while a correlation never tells you the arrow's direction by itself.
Next in this module come the slide deck, the Readings & Resources page, the lecture tutorial, the practice set, and the quiz, then the discussion, the assignment, and the Sociology in Action Workshop. Next week, in Week 10, the course turns to race and ethnicity, and how a social category is built and read in the data.
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