Worldwide Inequality Becomes More Pronounced
Both Wealth and Income continue to skew in favor of privileged 1% as seen in these reports and charts:
First there is the trend of income inequlity shows three disturbing trends:
First, the top 10% of the population continues to increase its disproportionate percentage of National Income giving substance to the OxFam 2018, OECD and IMF reports on World Income Trends while showing how deliberately distorted has been the World Bank conclusions.on Inequality and the Future of Work.
Second, a most interesting trend is how the two major Communist Powers, China and Russia, have matched the growth of inequality and the rise of their own ultra-rich to best some of their former Western country rivals. Third, correlation between Income and Wealth Inequality is depicted well in the IMF and Inequality Reports. and seen here:
In article in the Globe and Mail, Blanko Milanovic describes the consequence of Income and Wealth Inequality:
“Unfortunately, it is this within-country inequality that negatively affects our economies and our societies. There is now a substantial body of evidence that high levels of inequality are bad for economic growth …furthermore, as shown by Thomas Piketty in Capital in the 21st Century, in the absence of government intervention, market forces will often ensure returns to capital rise faster than the overall rate of economic growth. A recent research paper used data from 16 advanced economies between 1870 and 2015 to confirm this is not a new phenomenon…..
So why is this happening? Tax cuts for the rich, tax avoidance and evasion, financial deregulation, and the prioritization of returns to shareholders and owners by large companies have all helped the rich get richer while the poor and the middle classes are left behind. This adds to long-standing social inequalities – it is no coincidence that men are overrepresented at the top of the pyramid, and women are overrepresented in the world’s lowest-paid and most precarious jobs.”
Inequality Drives Social Unrest
Look at the recent headlines around the World:
- Big strike paralyses Tunisia, thousands protest over pay row
- Bangladesh strikes: thousands of garment workers clash with police over poor pay
- Food delivery drivers strike in HongKong to protest post-New Year pay cuts
- Eastern Europe shows labor strife … Audi workers’ strike over wages gap highlights salary strain in eastern Europe
- The Gig economy shows pay and working condition cracks … Uber and Lyft drivers in Los Angeles strike
- What teachers strike accomplished economically … and politically
But perhaps the most potent set of economic protest actions is by the Gilets Jaunes – the Yellow Vest Protesters in Paris France. One has to keep in mind that the French Revolution started 230 years ago with similar conditions:
- Financial: France’s debt, aggravated by French involvement in the American Revolution, led Louis XVI to implement new taxations and to reduce privileges. Today, France sees National Debt as a % of GDP at the 98% level [US -105%, UK 60%, Germany 60%, Spain 95%]
- Political: Louis XVI faced strong opposition from provincial parlements which were the spearheads of the privileged classes’ resistance to royal reforms. Today PM Macron, a Centrist, is challenged by strong rightists sentiment fueled by Russian Facebook and YouTube attacks.
- Economic: The deregulation of the grain market, advocated by liberal economists. Today, inflation is low at 2% but like Spain at 4% varies widely. Unemployment is at 10% compared to 17% in Spain. Economic growth hovers around 1% versus 3% for Spain.
The Gilets Jaunes – Yellow Vests continue to maraude the streets of Paris inflicting riot damage that has economic consequences beyond recovering riot damages. It is hard to predict how the Gilets Jaunes will proceed over the next few months. But clearly $100 millions for the repair of Notre Dame has underlined the basic Social Inequality that plagues not just France but whole World as so many workers pursue so fewer jobs and adequate incomes while the wealthy amass tax breaks and ever more wealth. Maybe the IMF Report.is worth a second look.