♪ narrator: the challenges facing our world are growing all the time. how do we build stronger economies with equal opportunities for all? how do we build a sustainable world for generations to come? how do we protect our cities and harness the power of technology for our common benefit? humanity has always been good at forward thinking. in this series, using the latest bloomberg research and analysis, we will make sense of the problems of tomorrow, sustainability, urbanization,

the gender gap, the march of the machines, and the demographic time bomb. and in this film, inequality. it is the issue that preoccupies economists, politicians, and campaigners. what does it mean for the security of our society and the strength of our economies? ♪ narrator: our world is a divided and unequal place. >> in a competitive economy, you will always have some inequality, and obviously you will have those who are successful and those who are less so. the issue is the extreme. >> 1% of the wealthiest populations hold more than half of the world's wealth. 62 wealthiest people hold the same kind of wealth as the lowest 50% of the world

population. it is a very striking statistic. >> if you look at ceo pay, it has gone from about 50 times the average worker 30 years ago to 300 times now, potentially not only an issue for investors, but it is also an issue for workers. ♪ narrator: inequality has become the hot button economic issue of the 21st century, but worrying about inequality is not new. >> if we look way back into u.s. history, we saw dramatic income inequality in the gilded age, the 1880's and the 1890's. and it went so far, and it collapsed, and policies were put in place by a number of presidents and administrations to sort of equalize the playing field. labor laws were put in place tax , laws were changed, and that prevailed through the course of world war ii and into the 1960's.

but then by the 1980's, tax laws were changed, and the economy had changed, and so from the early 1980's to the present, we have seen income inequality on the rise. it matters because income inequality eventually contributes to wealth inequality. with wealth comes power in terms of politics and corporate leadership and lots of different facets of the economy, and so when much wealth is held by a very few individuals within an economy or within a country then , those individuals tend to have an outsized degree of control over economic and political policymaking, and therefore they are able to incorporate policies that will even further increase their levels of wealth. ♪ narrator: inequality is about more than fairness. economists worry extreme levels

of inequality can have dramatic effects on corporations' finances and governments. >> it really affects the pace at which the world economy is growing. so to give you an example, the wealthiest as they get more money, they tend to spend less of the marginal dollar. so this way you get less consumption and consequently less growth in the economies. that is one kind of the consequence. another thing is that lower and medium income families tend to borrow more to support their consumption, and it creates risks. narrator: some of the most dramatic levels of inequality can be seen in the developing world. here, inequality appears to have a corrosive effect on the whole economy. >> something else that we have seen in emerging markets is a correlation between inequality and corruption levels, where

government is not effective, or there is not necessarily a good education in place to allow everyone to succeed. if you look at the arab spring in north africa and the middle east, the root cause was , you know economic opportunity. , so if you have this extreme inequality, if you have a lack of economic opportunity, you potentially have political unrest. ♪ narrator: if you are at the top of the pile, it is tempting to think inequality does not affect you. but this may be dangerously complacent. >> clearly, inequality is bad very bad for the people at the bottom, especially if the bottom is very low. at the top, there is a potential risk to what could extreme inequality bring? could it lead to political unrest? could it lead to new rules new , taxation? so i think in the short term, even if you are at the top of the economic pyramid, you may be very happy with your position,

but long-term, i think there is potential for change which may be destabilizing. >> if you think about it in a broader sense and think about economic growth in future generations, it is the best thing because that actually could impact economic growth in the world, so i would say that it is a problem for everybody. narrator: one global economist is convinced inequality is dramatically affecting human life even in the richest part of the world, and that if we want to maximize growth and social decision, it is an issue we can no longer ignore. >> absolute income inequality is where we have to have a debate. they are a clear knock on effects, whether in education access, health care options, but also political and life expectancy challenges. it is very much the case that income equality is now a driver in some of these other factors. ♪

narrator: inequality is one of the most hotly debated issues in

economics from new york to nairobi. dambisa moyo is a global economist. her work for the world bank and on wall street has seen her named one of the most influential people in the world. she is fascinated by the biggest trends in economics, from the politics of development in africa, to the price of commodities in china. now she is turning her attention to inequality. dambisa: income inequality is particularly problematic in as much as it is a defining factor in many societies for where a society's living standards are going. the data on income inequality has shown that it has grown worse over the last several decades. in fact, over the last 30 years, we have seen income equality worsen across the united states, the united kingdom, and across much of europe. in the same vein, we have seen

that the average income of the top 1% in the united states today is 30 times the average income of the rest of the population, the rest of the 99%. compare this with 30 years ago, with when it was simply 10 times 1978 higher for the top 1%. ♪ narrator: economists worry that inequality ushers in a range of social problems. recent studies in mexico suggest that neighborhoods with high levels of inequality may suffer more violent crime than those where inequality is less pronounced. researchers in other nations have come to similar conclusions. dambisa: a problem with income inequality is the implications and impact that it has on a society. the question being, is it possible for people of different income levels and without

prospects of improving their lives to live cheek by jowl? for example in the united states the bronx is the poorest , congressional district in the united states, but it is also 20 minutes by train, about five stops to one of the richest enclaves to the upper east , side of manhattan. there are real questions around whether living cheek by jowl is actually long-term sustainable given the risk of crime and also of destitution. there are knock on effects for other forms of inequality, such as health and education, and of course political inequality. in the united states, approximately 158 families are responsible for approximately 50% of campaign funding around the u.s. elections. that was the does pose the question about where democracy stands and how that might play into political representation of them in the democratic process. ♪ narrator: americans have always prided themselves on levels of

social mobility within their country, the ability of people to get ahead whatever circumstances they were born into. but some recent evidence suggests this is changing. dambisa: there is a more fundamental aspect to dealing with the income inequality challenge, which i would argue involves social mobility. and social mobility really is about people's beliefs and access to improve living standards and their livelihood over a certain period of time. i think that the cause of income equality is the breakdown of social mobility, particularly in the western societies. to give you a flavor of that, today in the united states, if you are born into the bottom 20% of the income level, then you have only 5% chance of ending up your life in the top 20% without a college degree. clearly that suggests that income inequality is widening, and that i think also it shows

there is a real issue around social mobility and people's ability to actually transform their lives and move into higher levels of income. ♪ narrator: as well as hindering social mobility, extreme levels of income inequality may depress growth across whole economies. dambisa: the reason that this is so important is that the oecd estimates that this is causing -- costing developed countries 8.5% gdp points over this period. put another way, because of so income equality and the widening effect of the gap between the richest and poorest in the u.s. and across europe, we have seen gdp growth slow by about 8.5% over the past 25 years. today, there are real concerns about how this bodes for the longer term and for the future. a lot of projections now show that economic growth will be

slowing, and obvously knock on effects of income equality are likely to be worse. ♪ narrator: this means inequality is not just a problem for those at the bottom of the economic pile. chronic income inequality may well affect the social and economic health of everyone. dambisa: if you are wealthy and living in an urban setting, for example, the fact that you are every day are dealing with people who have a lower income level but more importantly, have fewer prospects to improve their livelihood, has an absolute and direct impact on your safety, but also on your own living standard, to the extent that society as a whole will not be -- will not likely be growing. and so it is not just about lower living standards for that proportion of society, it's about lower living standards for the entirety of society because

the growth of a society is highly linked to how the average person in that society is performing. ♪ narrator: dambisa believes that the key to tackling inequality lies in reactivating social mobility. but to do that, citizens basic needs in terms of health and education must be catered for first. dambisa: i think that the thing that is of paramount urgency is to ensure that all citizens, and particularly people who are at the lower levels of income, are seeing improvements in their living standards over the long er period of time. the underlying challenges of income equality in a broader sense, which i would argue really are hitched to the idea of social mobility and the challenges there. narrator: but social mobility is propelled by economic growth, and without economic growth, inequality will rise. dambisa: just to be absolutely clear on that, we need to aim for at least 7% gdp growth every

year in order to double per capita income in one generation. we are far below that target, so it is really the case that we do have real issues around what the long-term prospects for economic growth are. but therefore what the long-term prospects of social mobility and our ability to reduce income inequality. our. ♪ narrator: if the problem of inequality is worrying for the west, that it is compounded in countries with fast-growing, young populations. if these economies are to have any chance of tackling inequality, they must create millions of jobs first. ♪ dambisa: beyond just the developed countries, of course there is a real concern around income inequality widening, particular in the faster growing, larger emerging market economies such as brazil, india, and south africa. today, there are approximate 85

million young people mainly in the emerging markets between 810 -- 18 and that are out of work. 25 if we are going to try to solve the income inequality challenges, we have to make sure we have growth, but we also have to make sure that we are providing incomes that are growing for this young population. we also have to make sure that people have improved access to education and to health care so that they have the social infrastructure to improve their lives and therefore support social mobility. without those factors, there is a real risk that living standards of not just the impoverished percentage of the population, but society as a whole starts to deteriorate. ♪ narrator: south africa is one of the most unequal countries in the world. here, the consequences of inequality on the safety of society are visible and real. but businesses are trying to restart social mobility and save the economy. ♪

narrator: inequality is one of the defining challenges of our age. in south africa, the most unequal country on the continent, its consequences can be seen in the continuing poverty of large parts of the country, and in the visceral crime that divides the wealthiest suburbs. >> taking a look at the big picture and the well-being of a country in the long run, it is very unhealthy to have this dramatic distribution of wealth and inequality. you will not be a successful model to live in the world where the haves are isolated in communities with very high walls around those communities while the have-nots are sitting at the gates begging for table scraps. ♪ narrator: in south africa, there are more private security guards than police officers. they patrol the country's gated

suburbs under the most visible example of an unequal society. >> crime is bad. in your home, out of your home, basically all over. i don't want to sound like it is terrifying. we live with it and have good lives here, however, trying to keep your family safe, trying to keep your home safe, has become more and more difficult, and that is what we focus on. narrator: css tactical is a johannesburg-based south african security firm employing 750 people. >> our approach is pretty much multiple layers of security. you would have your armed response. the vehicle is not just sitting under a tree waiting to be dispatched. they are actually present in the area, they are patrolling, up driving up and down the streets, and we have very intelligent software that alerts to unusual behavior, so if you're walking down the street at 5:00 afternoon going to work, -- going home from work, it is

normal. is people in the suburb instead of sitting under a tree waiting for an alarm to go off. narrator: fear of crime is splitting johannesburg in two, . the city experienced over 21,000 burglaries last year. >> johannesburg is the financial capital, so hence a greater concentration of i guess wealth and wealthy people and lots of stuff to steal, lots of stuff that you can see to steal. there is a massive difference between the haves and the have-nots. and i think unfortunately, people have seen the crime as a way to make a living. ♪ narrator: south africa is now more unequal than it was under apartheid. but some businesses across the country are actively trying to address this and get social mobility moving again. >> i was pregnant with my first daughter, and i was at home.

we lived on a farm, so i was at home during the day. i would talk to the ladies that worked in the fields next door that sort of thing. , and they were picking whatever, but they really had it, they had so much inside of them, but no opportunity to go anywhere. there was no opportunity for training or to get a bit further or anything. and also what i realized, there was no power possibility. -- power of possibility. narrator: erin, along with her sister, decided to set up a health spa. the plan was to recruit their staff from among the rural poor. >> it was literally a couple of ladies from the field next door, so everybody went home and found sisters and aunts and anyone that was unemployed, and of course we trained them up. i realized the importance and what it could actually do in south africa, very quickly. and realizing then the amount of lives you could change. ♪

narrator: christine buthelezi was one of the first women who erin and maven employed. christine: i was on my way, i remember one weekend, going to church, then i met a maid who gave me a lift. she started chatting to me, are you working, what are you doing at the moment? are you still at school and everything? currently i am working at a farm a chicken , farm. we were paid like 20 per day. then she said, but why don't you come and join? i said after a week, have got nothing to lose, so i went for my training. then from there, started working at the spa as a therapist. i started at the bottom. i really enjoyed it. then within three months, i moved into becoming one of the treating managers, and then within a year, i was promoted to be a general manager, which for me, it was such a growth in such a small time. ♪

narrator: it has become a prolific job creation scheme. expanding across south africa and propelling women like christine from rural poverty to senior managerial positions. >> we estimated we have trained about 20,000 people. we had ladies who have been with us for 8, 9 years, and they really reached the top. they were not managers. i am also proud to say that every single one of our spas is run by a lady who came up through the ranks. narrator: erin is going further rolling out plans across her , spas to give shares of the business to its employees. >> at the moment, i own 30% of the business. i wanted them to be part of the business, because when you're doing that many treatments in a day, you are giving so much of yourself. narrator: by training staff, giving them a route to move up the pay grades and offering them , a stake in their own business, aaron helps -- hopes this can

tackle inequality in south africa. >> i can look after my kids. i can look after my family. you know, we've let communities have so many families that we take care of, but i am the bread winner at home. everybody depends on me. as much as you have the other people that are working, but most of the time, i am the one who is taking that whole ability -- responsibility, so she has given us hope. it has made us like dreamers. narrator: inequality has come to define south africa's economy, but if more can be done to reactivate social mobility, there is a chance that this will not be the case for long. >> when households are really in a grinding state of poverty, they can't contribute a whole lot to economic well-being. so as lower income demographics are lifted up into working-class or middle-class thresholds, they tend to be better educated, less

there is less crime. there is a stronger family structure, and they tend to be a lot more productive in terms of the economy. and they also consume and invest a lot more as well. a strong middle class, a strong working-class, is really the backbone of a healthy democracy. >> i feel i am cautiously , optimistic about the future. i believe that the path towards a world of economic growth, of social mobility, and improved income inequality statistics, is one possiblity, but not without there being hard choices. whether it's improving social mobility, increasing economic growth we have to address those , factors to avoid a situation where a society and members of society become so disappointed. ♪

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ashlee: the year was 2047, and this is all that was left. the great space wars between the muscavarians and buffacytes had depleted the earth of all its natural resources, the bitcoin virus and uber's robot chauffeurs had finished the job. the only sign that humans were here, the ramshackle buildings