The income gap: a growing dilemma

Résumé du document

While considering the poverty line in France, it is amazing to note that the current statistics has revealed that nearly 4 million people are homeless in France. This kind of an alarming and unmatched growth pattern is also visible across some Asian countries. Despite this poverty issue that exists in France, a contradicting situation also persists where myriads of trendy cars such as Odessa, Italian Boulevard etc are being driven across France. Another interesting statistics states that there are nearly 30% of the working population that receive no wages or receive only partial wages (wage arrears). Some say that the poor are getting poorer and the rich are getting wealthier. However the proportion at which this proposition is arrived at is still unknown. Some experts have confirmed that the growth speed across developing countries is comparatively high and it is this factor that will slowdown the income gap. The question now arises on how this ratio or calculation and measurement is being arrived at. In our research, our readings have clearly depicted a growing income gap and a shrinking income gap is not visible. The author has selected comparative data (random selection) and the resulted conclusion that has been arrived at is that the income gap is growing. ?Bucketing' countries into groups results in a question on how to define those groups properly? This question did not provide us with a comprehensive answer. There are some theories that partially explain this growth in the income gap. However, it should be noted that there exists specific items that require, action, measures, correction, anticipation, etc in a simultaneous fashion. It is not one theory but some or a few theories that could help economists in explaining the events of the past and the undeciphered stories retroactive manner. Private foreign Investment is volatile in helping income gaps reduce, while it is public aid that is creating distortions in eradicating income gap growths and it is this growth of trade which is mainly increasing the income gap. The increase in trade will result in the developed countries and its corresponding governments to be able to setup proper policies through more governance. Private businesses should concentrate on unskilled workers to optimize their skills and on innovation.

Extraits

[...] There is no mass culture. A cultural choice is the evidence of a changing and complex world. Consistency: this theory should be retained in our case. The new World order actually in progress is a consequence of this diminution of class distinction Other approaches Altermondialism (Seattle hypothesis) Society is driven by multinationals (private companies) through governments. Such governance is not democracy; therefore World Bank, International Monetary Fund and World Trade Organization are representing technocratic classes and entrepreneurs united against barriers to competition. [...]

[...] Those micro-credits in addition to low barriers to entrepreneurship would stimulate unskilled people to produce more, affecting the GDP positively. Local production could be encouraged by restricting certain imports or via tariffs. Subsides could also encourage locals to compete with imports. In fact the growth of the income gap has to push developed countries rise the following question: do we have a social responsibility to reduce the income gap and what would be the benefits to do so? Research and technology in the private sector should be well governed as a future solution to distribution and social equality. [...]

[...] While the second one insures raise of GDP at low cost productivity and technology transfers (e.g. India, China), the first one is more related to insure new supplies from abroad (e.g. joint ventures between Chinese oil companies and foreign producers, directly on extraction point), low cost supplies to insure high margins (e.g. Nike) but is also composed by investments done abroad by pension funds, insurance companies and wealthy privates. This last category is the most volatile in absolute terms and probably enlacing the biggest amount of return on investments. [...]

[...] The more trade there would be the more developed countries governments would have to set-up proper policies through more governance. Private business should concentrate on unskilled workers to optimize their skills and on innovation. More growth in trade will tend to create more global areas, despite actual trend to localize trades and agreements. We think that Asia will be the next area of a new economic union. We believe that income gap will not be reduced unless a global social responsibility is not discussed between all agents. [...]

[...] Finally unskilled labor is affected. The model is consistent with the growing income gap Ricardo The Ricardian model rests on the assumption of different technologies in different countries, generating varying labor productivities, determining comparative advantage . This model excludes competition between countries even if productivity is unbalanced between those and possible barriers between countries to monitor it. Consistency: China is an evidence of this competition force, against which Europe had to react by introducing quotas (global textile quotas in 2005). [...]