Introduction to inequality Inequality is the gap between the super-rich and the rest of the world population
Introduction to inequality
Inequality is the gap between the super-rich and the rest of the world population. This divide traps millions in poverty, fracturing our societies and undermining democracy. This broken system favors the super-rich, allows big business and the billionaires to gather vast amounts of money at the expense of the rest of us. Extreme inequality fuels corruption.
India Inequality Report 2018, authored by Himanshu, Associate Professor of Economics, JNU, argues, that contrary to popular perception, India is a high inequality country by global standards. Inequality in India is multi-dimensional: There are inequalities in wealth, income and consumption, as well as structural inequalities of opportunity, region, and social groups. Our report argues that claims of India being a low inequality country are based on consumption expenditure inequality which is generally lower than income inequality—however, most other countries measure inequality on the basis of income. By Himanshu’s estimates, inequality in India measured by income, wealth and consumption show high inequality trends and that India is among the world’s most unequal countries. Further, and what is worrying is that not only is inequality high in India, inequality is on the rise in the country over the last 3 decades.
Types of inequality
There are 5 types of social inequalities. They have been listed below:
Political Inequality: The inequality in which there is no civic equality in front of the law.
Income and Wealth Inequality: It is the outcome or result which is primarily in the earnings of individuals.
Life Inequality: This refers to inequalities of opportunities if provided can improve the quality of life.
Inequality of Treatment and Responsibility: Although this idea is less examined it generates problems in agency and responsibility.
Inequality of Membership: This exists in the membership of faith, family, and nation.
How is Inequality affecting us?
Because so much wealth is concentrated with the super rich, very few resources trickle down to those who need them the most- the marginalized and the underprivileged.
Popular belief has it that working hard is the key to becoming wealthier. Yet, many of the super-rich do not earn their fortunes through hard work or talent. Two-thirds of billionaires globally have inherited their wealth or made it through monopoly rather than talent. The CEO of India’s top information firm earns 416 times the salary of a typical employee in his company. The rewards of a growing economy are enjoyed by billionaires and company bosses.
In addition, the top wealthiest people have the means to stash their wealth in offshore tax havens to dodge taxes. If fairly paid, these taxes could help the government provide essential services which mean quality education and healthcare for everyone in India.
Some Myths about inequality
Poor people are poor as they are lazy The CEO of India’s top information firm earns 416 times the salary of a typical employee in his company.
Poverty is reducing and so is Inequality One may experience inequality without being poor whereas everyone who is poor is at the bottom rung of the inequality ladder. The World Bank has estimated that extreme poverty will not be eliminated by 2030 – and 200 million will still be living on Rs 120 a day (the extreme poverty line).
Inequality is a natural outcome from healthy competition the huge inequalities we see today are the result of a rigged economic system that has enabled a small minority to amass huge fortunes through monopoly, cronyism, and inheritance.
All billionaires have worked hard to earn money Over two-thirds of billionaire wealth is amassed through monopoly, cronyism, and inheritance. Over the next 20 years, 500 of the world’s richest people will hand over $2.1 trillion to their heirs – a sum larger than the GDP of India, a country of 1.3 billion people.
It is not realistic to bridge the gap between the rich and poor it is possible. Evidence from more than 150 countries rich or poor shows that investment in healthcare, education, and social protection reduces the inequality.
How can we help?
Successive governments have failed to commit to reducing inequality in India. By raising your voice, you can urge the government to tackle inequality head on. Commitment at an influential international forum such as the World Economic Forum 2018, Davos will ensure that the government keeps its promise to the Sustainable Development Goal 10: Reducing Inequality by 2030.
Ask the government to do the following:
Create an economy for all: Promote inclusive growth by ensuring that the income of the bottom 40% of the population grows faster than of the top 10% so that the gap between the two begins to close. This can be done by:
• Promoting labor-intensive sectors that will create more jobs;
• Investing more in agriculture; and
• Implementing fully the social protection schemes that exist.
Seal the leaking wealth bucket: Reduce extreme wealth and create a more equal opportunity country.
• Tax the super-rich by re-introducing inheritance tax and increasing the wealth tax;
• Reduce and eventually do away with corporate tax breaks;
• Take stringent measures against tax evasion and tax avoidance; and
• Increase public expenditures on health and education.
Bring data transparency: Produce and make available high-quality data on income and wealth. And regularly monitor the measures the government takes to tackle the issue of rising inequality.