It is surprising, but true that inequality in society has increased alarmingly. It has been revealed by a study conducted by the Institute for New Economic Thinking (INET). The study shows that it requires a paradigm change in policy and political agenda to restore parity in the absence of which the society will stand divided between haves with fabulous wealth, and have-nots with no prospect or hopes.
So far as America is concerned, the policies to be adopted by the Democratic Party include raising the minimum wages, investing in infrastructure, plugging loopholes in corporate tax, and the lowering of tax burden on the middle class. The party also intends to implement such newer ideas as providing opportunities to corporate sector to maximize profit, sharing of profit with employees, and change in labor laws empowering employees with more bargaining power. However, all these mainstream Democratic ideas cannot prevent increase in inequality in the society. Neither the ‘inclusive capitalism’ of the Conservative can be helpful in narrowing the gap between the rich and the poor in the society.
The INET paper provides startling information that inequality has gone deeper than it apparently appears. It advocates change in policies and politics to arrest the widening economic gap between two sections of the society. The Palma Ratio was used to compare the rich with the poor, and it was found that the top 1% progressively increased the GDP share to 15% from a meager 5% over a period of two decades while that of the bottom 40%, it either declined or remained static during the period. The foregoing discussions point to a dismal future. However, with a genuine progressive political and social dialogue, the trend can be reversed. The situation calls for political leaders to look beyond the world of corporate donors and wealthy individuals, and focus attention on policies and programmes that arrest the ever widening gap between the rich and the poor.