Inequality of income is a complex problem found in most of the world, but one key factor of its understanding that needs to be acknowledges is; its genesis is completely different from system to system, country to country. With this in mind, finding any reliable, universal solution to reducing income inequality is not that easy.

Income inequality can be considered an economic disease, able to spread in any economy, at any time, but with the initial contamination taking root in many different cultural, political, and individual wrangles that have yet to be uncovered.

Economists, policymakers, and leaders around the world interpret the problem of income inequality from many different angles. In a broader perspective, it is viewed as the ill-effects of capitalism or the failure of the state to socialize its excess. Indeed, as we go further in our quest to find the roots and origins, we find a bubble of income inequality so large that its shadows are visible in China, India, Europe, and of course, the United States.

One popular factor closely associated with income inequality is education. At face value, it seems rather plausible to believe that people educated from world-class, top-tier universities and elite colleges will have an edge over others in influence, power, and riches.

Another line of thinking which articulates reason for differences between the rich and the poor is distribution of wealth. For example, in 2001, 10 percent of the American population held almost 71 percent of all the wealth in the U.S., and nearly 60 percent of the population held just close to 5 percent of the wealth. Further, it showed a distorted difference in wages between CEOs and the average worker. In 1970, CEOs made 39 times more than the average worker. In the 2001, that number had inflated exponentially and CEOs were now making more than 1,039 times more.

In India, income inequality has almost doubled in the last two decades. The top ten percent of wage earners now make 12 times more than the bottom 10 percent in the 1990s. Further, there is evidence of growing concentration of wealth among the elite. The consumption of top 20 percent of households grew with almost 3 percent per year in 2000 compared to 2 percent in 1990s.

There are no hard-and-fast rules that can solve our current economic problems. Income inequality is a product of not just defective economic policy, but rather it is an amalgam of various socioeconomic, political, and cultural factors. It is a multifaceted problem, entrapping the whole of society, and it requires determination to reach its roots and perhaps broad-based scientific study before all people can rightfully earn what they can.

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About the author

Muhammed Faraaz
Post-graduate in Economics from India, unfolding complexities and policies. Proponent of Classical Economics.

2 Comments for Income Inequality: Global Phenomenon, Local Solutions

Asif Iqbal

The world is struggling to overcome income inequality by finding different solutions, there is only one way out which is ISLAM SYSTEM a SYSTEM of GOD

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Raheem

Hi
Unfair capitalism widely known now we need to go completely new approach to address this problem I agree with above comment
This article is very written
Well done keep sharing such article

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