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Income inequality is growing, tackling requires defining mission

Zafar Bhat. Dated: 9/11/2018 9:46:50 AM

Zafar Bhat
Jammu, Sep 10
Predictably along with security, terrorism and climate change, the issue of growing inequality is assuming increasing prominence, and indications are that it will feature as a key policy focus in the next election campaign.
Particularly the demise of labor unions, the increasing financialization of the economy, and the lack of wealth-building opportunities in minority




communities – each of which has made the rich richer while leaving everyone else to flounder.
However, income inequality is at its greatest level in 70 years, with most Indian experiencing a decline in living standards and job security, making it "the challenge of our time". Unless it was addressed, Government was at risk of becoming a society characterized by high inequality and dead-end jobs, with long working hours, no holidays, zero job security and poverty pay levels.
Notably, these are the economic conditions that breed high levels of crime, discrimination against minorities and a broad range of social problems. The government must not go any further down this path. Instead, we must return to being a state in which families on a normal income can afford to buy a home, provide a good education for their kids and have a decent standard of living.
Earnings inequality has increased, with a marked shift to part-time work and underemployment, but said inequality overall had remained relatively steady despite those forces, because of progressive taxation and more low-income people gaining employment.
At the top of hit list is rent-seeking – increasing wealth by taking it from others rather than generating any actual economic activity.
However, while the gap between the rich and poor had not widened markedly in recent times. One of the more concerning trends is a growing wealth divide by age group. It's very much connected to what's going on in the housing market.
Other contributors, too: weak wages, ineffective regulation, and federal oversight, and a focus on short-term versus long-term growth, which embodies a preference for rewarding shareholders over workers and consumers.
At the top of his hit list is rent-seeking – the practice of increasing wealth by taking it from others rather than generating any actual economic activity.
Reducing rent-seeking is critical to reining in inequality, especially when it comes to complex issues such as housing prices, patents and the power that large corporations wield.
Agenda should also include: re-emphasizing the goal of full employment rather than focusing on the sometimes reductive unemployment figures; investing in public infrastructure; better access to financial services, childcare, healthcare and paid leave; and strengthened opportunities for collective bargaining.
Pertinently, despite this endless stream of ideas – much of it from some of the world's most renowned and respected thinkers – is it really possible to reverse inequality, or it is simply unstoppable?