Income Inequality is as old as humankind
Any activity that can be done by any human, and therefore monetized, can be a vehicle to drive inequality. Ever since humans started farming, some have done better than others. Thus some have done more profit than others.
In the book, “The Great Leveler,” by Walter Scheidel, there’s the argument that only the so-called “four horsemen”, war, disease, state collapse and revolution have succeeded in leveling income.
Although this is true, it isn’t the ideal way of reducing inequality. Any of the “four horsemen” is far worse than inequality.
“If you have a positive attitude and constantly strive to give your best effort, eventually you will overcome your immediate problems and find you are ready for greater challenges.” – Pat Riley
- Dynamic economies generate more jobs and recover faster from recessions. More jobs mean more options for all in terms of having an income. And if you have an income you have a way of saving more, and being less financially dependent. Thus reducing taxes and complexity on job creation is a must. For every country.
- Some suggest a wealth tax targeting capital gains more aggressively. I would partially agree, but only for higher levels of capital gains (those really high). We want people with less to none assets to build wealth and to increase returns on those assets. Therefore, for those, the wealth tax should not apply. Saving should be encouraged, not penalized.
- Greater investment in education is always a good solution for both: the uneducated and people that had their skills turned obsolete. The sooner you get back to the workforce the sooner you can start saving and investing again.
- A more targeted investment in personal finance education for all: People should learn the basics of saving money, what investment vehicles they have at their disposal, how to ask for a loan, and so on. I mean everyone from every sector of the economy should know the basics. Read this, and especially this.
Americans lack of knowledge about their personal finances costs them an average of $1,171 per person, according to a survey of more than 1,500 people released this month by the National Financial Educators Council. And nearly one in five estimated that their lack of know-how cost them $2,500 or more.
What you don’t know can hurt you — financially.
You will find more infographics at Statista
Bear in mind that the Oxfam methodology to calculate this inequality may not be adequate and some say that they’re extracting wrong conclusions from faulty / not contextualized data. Read this, this and this.
And you reader? Do you have more important issues regarding the economy? And solutions?