Mind the gap between the rich and the poor.
Day 9: “Economical inequality”
As it hints in Day 8, Day 9 I will be focusing on the large and vast economic gap between the rich 1 percent of the worlds population and the 99 percent of the rest of the world. I will also be trying to understand the view points of the poorer people of the world and their views on the rich. Then I am going to try to explain why inequality is bad for economy in general.
How large is the gap
For this section I will be briefly looking at Great Britain as an example as this is the easiest for me as it is my home country. The UK has an extremely high level of income inequality and has poor overall equality between the rich and the majority of poor. Wealth in the UK is even more unequally divided than income. For example in 2016 the ONS calculated that the riches 10% owned 44% of all wealth in Britain. This contrasts with the poorest 50% owing only a mere 9% of the UK’s wealth. In 2018, households in the bottom 20% of the population had on average an equivalent disposable income of £12,798, whilst the top 20% has on average £69,126. These small statistics show clearly that there is a very large difference between the rich few and the poorer majority of the UK’s general public. It is horrifying to know that still in the 21st century a country such as the UK has no ability of wish to create a more harmonious and equal society.
All of the above information was taken from one sight and is a condensed version of this article. You can go to this site to read the article in more depth if you wish. I will also add a link to that sight.
The problem of inequality for society
The negative effects of large scale inequality, researchers have found, include social problems in the wider community and higher rates of social health problems and lower rates of positive social outcomes. Crime also goes up. Inequality between the rich and the poor leads to in the latter society a lower population-wide satisfaction and happiness and even lower levels of economic growth due to human capital being neglected for high-end consumption. Also a more obvious problem is that in the top 21 industrialized countries, counting each person equally, life expectancy is lower in more unequal countries.
Crime:
Crime rates have been shown to correlate to inequality in society. Most of the studies that have and are being conducted look into, specifically homicides as homicides are almost identically defined across all nations and jurisdictions. To date there have been over fifty studies showing tendencies for violence to be more often than not linked to societies where income differences are larger. This ideas is backed up by the research that has been comparing developed countries, with more equality, with undeveloped third world countries. For example, Daly et al. 2001 found that among US of A states and Canadian provinces there is a tenfold difference in homicide rates related to inequality. They concluded that about half of all variation in homicide rates can be accounted for by differences in the amount of inequality in each province or state.
Health:
The British researchers Richard G. Wilkinson and Kate Pickett have been able to find that there are higher rates of social problems such as, childhood obesity, teenage births and drug use, related low social health. For most of humanities existence material living standards that include a full stomach, access to clean drinking water and warmth from fuel lead to better health and longer lives. This pattern of people on higher incomes live longer still holds among the poorer communities, where life expectancy increases rapidly as per capita income increases, but in recent decades it has slowed amongst middle income countries and plateaued among the richest 1%.
In recent years the characteristic that has become very strongly correlated with health in developed countries is income inequality. Both Richard Wilkinson and Kate Pickett found that health and social problems, “more prominent in countries with a larger overall income gap” and poorer income inequality”
Societal problems:
Research has shown an inverse link between income inequality and societal problems. It has also been evidenced that in more equally levelled societies, people are much more likely to work as a cohesive unit. Also greater community commitment to each other directly correlates to lower homicide rates. Eric Uslaner and Mitchell Brown found there is a very high correlation between the amount of income equality and the bond an unity in poorer communities. In a 2008 article published by Anderson and Fetner also found a strong relationship between economic inequality between the rich and the poor within and across countries and tolerance for 35 demographics.
All of the above information was taken from one sight and is a condensed version of this article. You can go to this site to read into the article called Effects of economic inequality in more depth if you wish. I will also add a link to that sight.
This brings Day 9 to a close. As per usual I hope you have enjoyed todays blog and have found it interesting to look into the economical effects of the rich and poor gap on todays societies in general. Day 10 will be called “ Well behaved firms.”
