Davos 2013: Severe Income Inequality

Last week – an overview of the 2013 World Economic Forum. This time, as we’ve committed, we bring you the biggest global risk and its underlying solutions.

As in last year, severe income inequality once again topped the greatest concerns of this year’s annual meeting at Davos. Coming in second to fifth were: chronic fiscal imbalances, greenhouse emissions, water supply crisis, and the management of population ageing.

A closer look would reveal that money matters are hurting this world more than the environment and other human issues. Obviously, everybody wants a fair share of the pie. And really, everybody deserves it.

Yet what is fair? Equal as in equal? Well not literally.

This equal means having a globally standardized compensation according to level and skills, however, not overpaying those highly skilled workers nor underpaying the less skilled ones; more so, eliminate any sort of discrimination. We are all well aware of the damage that discrimination does – notice the disenchantment around the globe? These are the first steps.

Another perspicuous solution would be entrepreneurship. By encouraging and supporting entrepreneurship, you not only help create jobs but moreover, even just for “equality” sake – the entrepreneur himself now has a chance to somehow dictate his desired earnings.

Fourth would be to loosen migration laws if only for genuine job seekers and allowing needed workers into their respective countries. For one, there are countries whose population is ageing – so, why not really bring down those barriers and accept more foreign workers?

Then, we also have to have greater control of prices from raw materials to finished products. Apparently, compensation is driven by the company’s overall competitiveness; and if there’s more control to prices as well as better profits then companies would be more than willing to increase salaries or at the very least, workers would be satisfied with their existing salaries due to its buying power.

Also, we know how taxes affect one’s buying power, hence, governments should adjust taxes – not only among the rich and poor but take a second look at industry taxes as well. The world understands that luxury goods should have more taxes as compared to basic needs for one. Then why not fix the ship before even trying to get crews?

Still, another one would be to impose limits to resources’ accessibility; otherwise, the rich would only get richer while the poor gets poorer. See, once business is toned, those inside would be mellowed. They would be less like wolves just trying to prey on weaker animals. Well, yes, advancement could somewhat slow down but it’s just a small price to pay in pursuit of equality; even so, advancement would not come to a screeching halt.

Finally, what would be worth noting is the updating of one’s skills and abilities. Clearly, by doing this, the individual would be more competitive in his industry. Yet just like having a degree, it’s not a guarantee to even get you a job as many are trying to enhance themselves as well.

Some measures may sound common, but then, come to think of it – they’ve been overlooked, misanalyzed, or those in authority simply lacked the courage to implement change; thus, this global risk persists.

What’s your take?

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