vWe live in a world where data is abundant, but we lack basic information about inequality. Although governments around the world publish annual economic growth figures, they do not specify how growth is distributed among the population.”
With this phrase begins a report by the Laboratory of Global Inequality of the School of Economics of Paris and the University of Berkeley, California, and which brings together more than a hundred social scientists committed to helping understand the factors driving inequality around the world. .world.
The report states that when it comes to income, “the richest 10% of the world’s population currently receives 52% of the world’s income, while the poorest half of the population earns 8.5%.”
In terms of wealth accumulation, global inequality is even more pronounced. “The poorest half of the world’s population owns only 2% of the total wealth. In contrast, the richest 10% of the world’s population owns 76% of all wealth.”
The inequality gap in the world and also in Spain has opened up on both parameters, in what we earn each year and in what we accumulate over the years. The rich class is increasingly separated from the middle and poor classes.
Inequality varies significantly between the most equal (Europe) and the least equal (Middle East and North Africa) regions. Even the highest middle-income countries, some are very unequal like the US, while others are relatively equal like Sweden. The same is true in low-income countries. According to the World Bank, inequality is an important dimension of well-being with direct consequences for a country’s ability to reduce poverty.
Therefore, inequality is inevitable, but responds to a political option.
Since 1980, two distinct political-economic lines have coexisted: liberal governments such as Reagan and Thatcher who defended non-intervention of the State, reducing taxes to increase activity and, thereby, increase income. And the second group advocates that the rich pay more so that society is balanced.
The reality is that lowering taxes on the wealthiest people results in lower tax collections, not increases. Countries with less income.
However, the increase has not been evenly distributed. Countries such as the US, Russia and India have seen spectacular increases in inequality, while in Europe and China the numbers have been smaller. Likewise, there has been an increase in private wealth compared to a decrease in public wealth. In the US, France, Japan, UK, Germany and Spain in the last three years, private equity increased while public equity declined. Over the past 40 years, countries have gotten richer, but their governments have gotten significantly poorer.
Spain has a similar level of inequality to Europe, but is above the European average when analyzing the level of income inequality after taxes and social transfers and when analyzing the percentage of the population at risk of poverty. And this reflects the limited redistributive capacity of the fiscal system and its welfare state.
By 2020, the poorest 50% of Spain’s population will earn an average of thirteen thousand euros. The 1% concentrates more than 12% of total income, generates an average of 380 thousand euros per year and collects almost 24% of the country’s wealth, three points more than in 2013.
We had thought that the pandemic would make us more supportive and a more united and cohesive society.
But reality denies it. Gone are the applause from the balcony that goes to the toilet, the songs to cheer up the neighbors. Now the claims of individual rights and the exercise of liberties prevail in the population sector. The right not to wear a mask, to a bottle, to a free assembly …
Likewise, the coronavirus has yet to cut the trend towards greater inequality. Quite the opposite: it has accelerated that process. Pope Francis also echoed the theme: “The pandemic has highlighted the rampant inequalities in the world that have left many people with uncertainty, sadness and a lack of hope.”
However, in rich countries, government intervention has prevented a massive increase in poverty, not so in poor countries. This demonstrates the importance of the social state in fighting poverty, explains Lucas Chancel, lead author of the report.
On the other hand, global income and wealth inequality is closely linked to ecological inequality and climate change: the top 10% of emitters are responsible for about 50% of all emissions, while the bottom 50% make up 12% of the total.
One of the main obstacles to social development is inequality. It does not only concern economic inequality, but also pays attention to basic needs or human rights. Under normal conditions, all deficiencies are packaged and suffered by the same person. This is a difficult circle to escape. Poverty is generally hereditary.
At this point it is questionable, is it fair for this inequality to exist? There is poverty because there is wealth. This is not only a matter of accumulation but also of unfair redistribution.
As Pope Francis said in his encyclical Gospel of joy, “The right to private ownership and purpose of goods is balanced by solidarity and fair taxation. Ownership of private property is justified in caring for it and enhancing it in a way that better serves the common good.”
In Euskadi, in 1989 after the industrial decline, the Minister of Labor of the Basque Government, José Ignacio Arrieta, launched the Comprehensive Plan to Combat Poverty, Social Emergency Assistance and Minimum Insertion Income, now called Income from Income Security, and with a current budget of 370 million euro, is an economic benefit that aims to meet the basic needs of the family without adequate resources. They were and are an important instrument for maintaining social cohesion in the Basque Country.
Private and non-profit organizations, such as Cáritas and the Food Bank, assist in this same area. The Food Bank, for example, serves more than 24,000 families and 4,000 underprivileged groups each month.
However, neither the RGI nor the work done by these organizations should become chronic over time for the families themselves, but rather valid instruments until they can rejoin the workforce. In other words, if wages are very low, the necessary transition from beneficiary to full-time employment will not occur. Moreover, if economic growth and corporate profits are not distributed equally between capital and workers, we will have families whose members, even though they work, need to receive assistance to live with dignity.
For this reason, social policies must be accompanied by labor and economic policies that promote this equitable distribution of wealth. This is not a unique task of government. In addition, it is necessary to restore the conscience and behavior of individuals who seek to prioritize the collective over the individual.
But there is no good wind for this model, quite the opposite. Maybe we all think that we will always belong to the group of the rich.
I hope I disagree with author Noel Clarasó when he says that “the world’s money will always be poorly distributed because nobody thinks about how to distribute it but about how to store it.” Economist
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