In this article author evaluate the economic consequences of income inequality and states about the experience of her own country trying to address it.
Key words: inequality, society, issue.
A nation will not survive morally or economically when so few have so much, while so many have so little.
Bernie Sanders
Income inequality has always been a big issue in our society and the government is supposed to solve it. Some individuals believe that everyone should try their best and work hard to succeed in life, otherwise, you are the only one who is responsible for your wealth. Others tend to believe that the government should care about its citizens and that people have nothing to do with poverty and it’s not human beings' fault.
How we can adequately evaluate the consequences of income inequality in today's society? Is the problem that big or people are just dramatizing it for the sake of drama? Or maybe people claim it because they don’t want to take the risk and rule their income?
I agree with the statement that governmental entities made citizens think that they are the only ones who are responsible for one’s income and if you are financially unstable then it is probably your fault. Frankly speaking, it is true, that not only the government but also social media platforms, influencers, and entrepreneurs influenced locals by giving them an idea of how they ended up being poor, with huge amount of stress and thousands of dollars in debt. As I said above, human beings have nothing to do with being poor and getting less income than their outcome. Furthermore, this has a huge impact on the economic growth of one’s country. Let me explain it with arguments and give some research work on that topic.
Society can be divided up in lots of different ways of inequality. Some of them are based on gender, race, nationality, and wealth inequality. In the worldwide economy income inequality has become more widespread among adults living. But today I would like to talk about my home country Kazakhstan and post-soviet countries. According to research work of local economists in 2022 «There were more poor people in Kazakhstan who could not afford healthy and nutritious food as much as they needed. For the first time in recent years, the prevalence of malnutrition among vulnerable categories increased by several percentage points at once — from 6.7 % to 8.4 %. The ranges were strongly impacted by people who live in the big cities. In large cities, this figure was higher (10.4 %), and in rural areas — lower (5.1 %). Compared to 2017, the proportion of the poor suffering from malnutrition increased from 3.6 % to 8.4 %».
In rural areas (auyls: villages in Kazakh) population tends to engage in agriculture and grow vegetables and fruits which is a great source of nutrition and income at the same time. But is the problem so sufficient?
Adults who live and work in the cities normally do office jobs. People in my home country tend to work a lot more than people in the US who usually do 9–5 jobs and work officially 40 hours per week.
In Kazakhstan or any post-soviet countries, it is vastly different. Most of Kazakhstan citizens work from 8 to 6. Furthermore, they have only 1 day off, usually it been Sunday. So, citizens have to work 60 hours per week and they do not get overtime, authorities will not pay you more than your setup salary in any conditions. Workers in the US are aware of employees' rights and even posters with employees' rights are hanging on the wall in some workplaces, which was found extremely helpful. The governments of developed countries make sure that employees' rights are protected. But Kazakhstani residents are not. If an employee is out of the workplace the employer can still require the employee to finish some work so employee continue working even though he/she is not getting paid for that. That is a total red flag and irrespective of employees' rights.
People from rural areas do not do an office job, because there is a lack of workplaces and the whole employment system is very undeveloped. You will probably be shocked by reading this, but my parents’ experience will come there and I can confirm that rural people make a living by selling animal products, such as milk, meat, and Kurt (salted cottage cheese, Kazakh traditional food). If they are hungry, they will eat domestic animals, the ones that they’re raising and mothers will feed their children with beef, goat’s milk, or horse meat. Moreover, hand-grown vegetables, apples without chemicals, and other kinds of food are available for consumption.
Because of the lack of job opportunities many young adults tend to go to big cities and change their whole lives and routine for the sake of living. Many of them go to larger places such as Almaty, Astana, and Shymkent seeking job opportunities. Those cities, especially Almaty, are overpopulated and the city has problems with air quality and pollution, the inhabitants from various villages coming from all over Kazakhstan and the government, that cannot handle it — could be a main reason. Migrants from other developing countries are stopping by in Almaty so just they can figure out if would they like to live there or not.
Leaving your family and house for the sake of surviving and settling down in big cities is like playing the lottery. Employers will not always treat two different people from two different backgrounds equally. A man who came from a village and a local one. There always be a huge difference between them and of course, they will not get the same salaries despite their same efforts. A non-first-gen urban citizen will always look down on the one whose roots are from villages.
It leads us to income inequality. Getting treated differently despite doing the same job. There are wealthy people and the ones who are unable to make ends. Some people can’t decide where they will have breakfast tomorrow because they have various options available and the people who don’t know how to find a meal for today. Does it mean that they are putting in different efforts and elites are working harder to get this wealth? Maybe, but only a few of them and I doubt it, as everyone, of course.
How the economy changed because of the wealth inequality? It changed drastically because several fields were influenced by income inequality.
Education. People who have just a high school diploma expect less career growth compared to those who have undergraduate and graduate degrees. Salary expectations will go down. The only type of position that gets an attractive amount of money is C-Suite executives. And this leads to many questions.
Economy. Economic conditions went slow and weakened, and the rate of unemployment rose. Entrepreneurs always feel frustrated, business investment gets slower. Kazakhstani citizens went from having 0 % debt to having $1500. It is not a one-term purchase, but it’s a system called «Buy now, pay later», killing its citizens makes people pay a huge price monthly with percentages added.
Income inequality is a serious issue because the lack of financial stability for big portions of a population can promote extremely destructive social and economic upheaval in general, as well as financial hardships and lower standards of living in some way.
The one who is responsible for the issues that are causing income inequality is each country’s government. The Mayor of the state should be aware of the problem and try to solve it. Without support from the government it’s impossible to address the issue. To reduce income inequality, governments and corporations should start from the roots and work on its various causes, wage stagnation, large imbalances in compensation, unfair taxation, and discrimination between people who come from different backgrounds.
«The drivers of inequality vary widely amongst countries, with some common drivers being the skill premium associated with technical change and globalization, weakening protection for labor, and lack of financial inclusion in developing countries. We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down. This suggests that policies need to be country specific but should focus on raising the income share of the poor, and ensuring there is no hollowing out of the middle class. To tackle inequality, financial inclusion is imperative in emerging and developing countries while in advanced economies, policies should focus on raising human capital and skills and making tax systems more progressive».
According to Britannica, policies focusing on the increasing the incomes of the poorest include increasing employment or wages and transferring income. «Policies to address income inequality can focus narrowly on individual skills, opportunities, and aspirations or may focus more broadly on altering the social, political, and economic structures that create and maintain income inequality».
In conclusion, wealth inequality is a massive issue in today’s society, but it is preventable with a help of policies and right institutional organizations.
References:
- Dabla-Norris E. et al. Causes and Consequences of Income Inequality: A Global Perspective. — International Monetary Fund, 2015. — №. 2015/013.
- Dabla-Norris, E., Kochhar, K., Suphaphiphat, N., Ricka, F., & Tsounta, E. (2015). Causes and Consequences of Income Inequality: A Global Perspective (No. 2015/013). International Monetary Fund.
- 2024 Encyclopædia Britannica, Inc.
- 2013–2024 RANKING.KZ
