Businesses are doing well but the workers are not necessarily sharing that prosperity. Inequality is everywhere! Income inequality is a three decades trend, reasons for this include technological advancement which replaces the workers, middle management involved getting huge profit margins, globalization leads to wealth transfer, changes in labor laws and international investment demanding short term profits.
Looking at things macroscopically, equality is maintained in the world as countries like India, China, Brazil, etc are emerging as developing countries. Within individual countries, inequality has gone up in almost every country. Top 1% of income earners garnering 22% of total income in India. Globally, 8 out of 10 people just have 6% of the world’s wealth with them. To understand the extremity of the situation, 300 rich people have the same wealth as 3 billion poor people. Today, developed countries are 80 times richer than the rest of the world. To narrow down the gap, developed countries are aiding the world with $130 billion but it is not effective. One of the main reasons for this failure is that large corporations are taking $900 billion out of poor countries each year in the form of tax avoidance.
This might seem a headache of the government to solve, but analyzing the problem microscopically, one will realize that income inequality has a lot of social impact on every individual. Carl Shurz quotes, “You cannot subvert your neighbor’s rights without striking a dangerous blow at your own”.
Social relationships are impacted as people with low income are prone to more crimes that affect every individual’s well- being. Income inequality will slow down economic mobility, which means a person born in a low-income family will be provided with lesser opportunities to become wealthy with hard work and determination. This will waste the talent of a nation just because an individual did not get enough spotlight and you are likely to stay in the same financial status regardless of how hard you work.
The good news is that this problem comes with the previously proven solutions that have worked in other countries. The three most acceptable solutions include making higher education affordable, which increases the chances of a person born in a low-income family by 3 times to level up. The progressive and fair tax system will distribute the burden unequally which will help people with low income to progress. Health care access to all will avoid low-income individuals to go bankrupt from an accident or illness.
Wondering how you can contribute to fix this issue? You need to vote for an individual who does not merely support his/her community but understands income inequality problems. Pay every individual a livable wage who works for you. This will prosper our society as a whole and move towards a democratic nation!