Gap Between Wealthy And Poor: Inequality

Discuss about the Gap Between Wealthy and Poor for Inequality.

 

Introduction:

The gap between wealthy and poor can also be termed as inequality. This inequality is not persisting in the individual but also persisting in the countries as well. This is considered as the major issue these days and this issue of inequality is related to inequality in the education, opportunities, processes and pay. This essay discusses about the trends in the inequality that is exiting in the society these days and also the reason behind this inequality. It focuses on the factors that contribute in widening gap between the wealthy and the poor nada los provides the discussion that helps in understanding the background of this problem.

Trends in Developed and Developing Countries:

The rise in gap between wealthy and poor is getting wider. This gap is also termed as income equality. Income equality is observed to be rising in many countries. The data of 1980 suggests that the disposable income in average of the people in rich 10% richest OECD countries was observed to be seven times higher than the poor countries. In today’s data, it has been observed to be 9.5 times higher (Landes, 2015). That means the gap between the wealthy and the poor people is getting wider.

It is not only the scene in the wealthy countries but the countries that are considered as poor are also facing the same situation of widening gap between the rich and the poor. It has been observed that the developing countries have reduced their graph of poverty but at the same time the gap between wealthy and poor is increasing (Reardon, 2013). As far as Asia is considered, the gap between rich and poor in China is increased by 1.6%. It has been analyzed that the main reason behind theses gaps in both the developed and developing counties is income gaps. But, there are some other factors also that contribute in income or wealth inequalities in the countries and in the overall world. These other factors can be the unequal opportunities that are available in the market for the people. This inequality of opportunities occur in the fields such as in education, health care, employment etc. These inequalities in the opportunities restrict the poor people to access these opportunities and thus they remain poor and the rich people who can have access of these opportunities becomes more rich and wealthy by taking advantage of these opportunities (Gilder, G. (2012). Other causes that can have more impact on the widening of his gap are economic as well as social changes and inequalities. Technology and the globalization are also the factors that play an important role in increasing the income of wealth gaps among the population. In terms of income, the factors such as tax policies, compensation policies etc. also affect the occurrence of gap.

Reasons Behind Increasing the Gap between Wealthy and Poor:

Globalization and technology:  Globalization is considered as one of the major factor that has its impact on the process of widening gap between the rich and the poor. Globalization is the results of technological flow in the society (Reiman, & Leighton, 2015). As the technology is going through different advancement the globalization in the world is increasing because the technology is providing different mediums to the people of different countries to connect nada los results in Foreign Direct Investment. Technology also results in industrial revolution in the countries and thus replaced the human workforce with the machineries but still the workforce were required to operate these machineries. Changes in the technology affect the workforce in terms that the introduction of the machineries in the organization leads to devaluing the efforts of the men and their skills. The technology has also created a revolution in the types of jobs and skills required (Gelman, 2009). Earlier, the physical efforts were required to conduct a job but now the skills of operating the machineries are required from the employees. Some of the authors suggest that there is a race between technology and education and thus the people having education can also attain those opportunities because of less technological or technical knowledge. As the technical courses required the money to invest thus the people who cannot afford to gain that knowledge remain in the jobs that require physical efforts and thus get lower pay then the people who are technically strong in their knowledge. These differences in the approach to the technical courses results in widening the gap between rich and poor. This is because rich can have access to such courses and become richer by getting those higher paid jobs and the poor who cannot have access to those courses remain in the low paid jobs and become poorer.

As far as the current scene is considered, it has been identified that the education is behind the technology in the technology-education race (Reardon & Bischoff, 2011). This leads to growing danger for the people who are educated with lower level of courses because their jobs are eaten by the technological changes.

Another factor that has its impact and contribution in widening the gap between wealthy and poor is the changes at the workplace. The changes in types of jobs or traditional jobs are declining at high pace. It has been observed since year the way the people work in the organization is changing, the 9-5 jobs are declining along with the culture of unions (Brzozowski, Gervais, Klein & Suzuki, 2010). Both of these factors or trends have large impact on the wealth inequality persisting n the society. the jobs  that are persisting these  days are called nontraditional jobs such as part time jobs, short term jobs, jobs on contract basis etc. from 1990’s it has been observed that OECD countries consisting of half of the jobs that are nontraditional in nature. Now, the question arises how these jobs have an impact on income of wealth inequalities (Atkinson & Piketty, 2007).  The impact of these factors on income equality is that it is affecting the pattern of the jobs. Most of the people that are recruited or hired at middle and lower level jobs are on contract basis. The companies hire a large number of people for short term and pay them less. It is not only the pay that is affecting the workers but it also leads to unstable working condition for them. They can be fired anytime as the work of the employer gets completed. This instability is affecting the regular income of the people and thus widening the gap between the wealthy and the poor. The decree in union membership has also been observed (Brady, 2009). In New Zealand, 70% of the workers were in union membership till 1980’s but after that the number has declined to 17%. This affect the negotiation power of the workers and thus the employer pay according to their will.

Conclusion:

The overall analysis concluded that income inequality or the gap between the wealthy and poor is increasing day by day. There are various factors that are affecting this process of increasing gap between the poor and the rich. The factors are globalization and technology this is changing the required skills of the workforce and leads to race between the education and the technology (Reardon, 2011). Another factor is the workplace changes, the change in the pay scale of the people and the type of job required in the organization results in low pay scale of the labor class and high pay scale of the higher class who are already rich and wealthy. 

References:

Atkinson, A. B., & Piketty, T. (Eds.). (2007). Top incomes over the twentieth century: a contrast between continental european and english-speaking countries. OUP Oxford.

Brady, D. (2009). Rich democracies, poor people: How politics explain poverty. Oxford University Press.

Brzozowski, M., Gervais, M., Klein, P., & Suzuki, M. (2010). Consumption, income, and wealth inequality in Canada. Review of economic dynamics, 13(1), 52-75.

Gelman, A. (2009). Red state, blue state, rich state, poor state: Why Americans vote the way they do. Princeton University Press.

Gilder, G. (2012). Wealth and poverty: A new edition for the twenty-first century. Regnery Publishing.

Landes, D. S. (2015). Wealth and poverty of nations. Hachette UK.

Reardon, S. F. (2011). The widening academic achievement gap between the rich and the poor: New evidence and possible explanations. Whither opportunity, 91-116.

Reardon, S. F. (2013). The widening income achievement gap. Educational Leadership, 70(8), 10-16.

Reardon, S. F., & Bischoff, K. (2011). Income Inequality and Income Segregation 1. American Journal of Sociology, 116(4), 1092-1153.

Reiman, J., & Leighton, P. (2015). The rich get richer and the poor get prison: Ideology, class, and criminal justice. Routledge.