Earlier this week I was at a global economics presentation and saw what I thought was a fascinating chart.

It was originally introduced in 2012 in a World Bank working paper by economist Branko Milanovic. While it has been around for a while, it recently found new life in the financial press as the UK's Brexit vote and the victory of U.S. President Donald Trump brought world attention once again to the notion of populism.

The chart illustrates who has benefited and who has lost ground in the golden age of globalization – roughly from the fall of the Berlin Wall to the 2008 financial crisis.

During that time, lower-income populations around the world saw sizable gains relative to their incomes. Those in the top 1 percent financially made strong gains as well. But those whose incomes fell within the 75th to 90th percentile saw relatively little improvement - and in some cases were losers in the era of globalization.

This can be seen in the graph below, where the trend line appears to trace the outline of an elephant.


You can see that individuals in lower-income categories around the world saw new wealth from 1988 to 2008, as manufacturing moved to developing countries. The middle of the chart, where the increase in real income was the highest, represents the emerging global middle class in countries such as China and India.

Those in the top income tiers benefited during this period of time as well.

But where the curve dips down sharply – along the “trunk" – you can see that income fell. This primarily affected middle-class individuals in developed countries such as the U.S. and UK, former communist countries and Latin America.

The chart makes it clear which groups lost ground during the era of globalization. These are the voters who made their voices heard in the last few months.

After the French election earlier this month, markets have become complacent about the wave of populism, but this is where nuance becomes important.

French candidate Marine Le Pen was labeled "far right" during the presidential campaign in that country. But that was due to her stand on immigration and her desire that France leave the European Union.

Her economic policies were decidedly far left and matched many of the leftist candidate's policies. Although she did not win, she and the leftist candidate together carried 42 percent of the vote in the first round of the election.

My View: The last two European elections did not produce populist winners. But that does not mean that the frustrations of globalization have gone away, or even been adequately addressed. As long as the benefits of globalization are felt unequally, we will continue to see populist pressure on policymakers and the electorate.

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