Can Income Inequality be Justified?
By Aliya Machat
Income inequality is a huge issue in Britain, ONS calculated in 2016 that the richest 10% of households hold 44% of all wealth. However, income inequality is not just present in Britain in fact it is a global issue. Statistics show 0.9% of the world’s population owns 56.5% of all wealth whereas 46% of the population owns just 2%. How can this disparity exist? How can a small percentage of people own a large amount of wealth? Functionalists believe strongly in the existence of meritocracy. This is the idea that everyone has an equal chance to succeed however some are more talented than others therefore these individuals will be more successful. Functionalists would explain this inequality as necessary and fair, the people who own this ridiculous amount of wealth is because they earned it.
However, data clearly shows that this is incorrect. If we look at how income is shared in regards to race, ethnic minorities repeatedly earn less when compared to white people. For example, employees from the Bangladeshi ethnic group, on average, earned 20.2% less than White British employees. In addition, to this, employees in the Pakistani ethnic group had the lowest median hourly pay. This can be due to a variety of reasons, for example, stereotypes and racism in the workplace act a barrier to hire these ethnic groups in the first place leaving low paying jobs as the only option or unemployment altogether. This can be supported by the fact that White British people account for 79.5% of the working population whereas Black African, Caribbean or Black British account for 3.2%.
These statistics show meritocracy is not an adequate answer for why income inequality exists. It cannot be that a particular race is just more hard-working or ambitious than another, it is far more complex. Income is clearly not shared equally among the ethnic groups. If we look at gender, income inequality is even more unbalanced. For example, there are only 10 women in the top 100 billionaires. In addition to this, men roughly earn 19% more than women. These stark inequalities can be explained by the old fashioned view of women that arguably still dominate society. Women are expected to get married and start a family with their career being less important, although society has progressed and women are seen as more equal to men these dominant ideas have not just disappeared. This is supported by the fact that 24.5% of women work part-time versus 12.4% of men. Perhaps once couples have a child the woman is usually the one who goes into part-time work to take care of the child. The effect of all of this is that the woman will earn less whether it’s because she’s doing less work or in a lower-paying job. Again, income is not shared equally or fairly.
All of these statistics are vital in showing inequalities however they do not offer any solution in getting rid of these inequalities. So, how can we get rid of these inequalities? The two main reasons for wealth are inheritance and the idea of being ‘self-made.’ Is it possible to ban inheritance and live in a world where this is not accepted? Arguably this idea could backfire, if inheritance doesn’t exist then possibly people would not strive to succeed, as when they die their money would go to the state or government rather than stay in their family. Success becomes finite as ‘your legacy’ cannot live on. Additionally getting rid of inheritance wouldn’t stop the issue as those that have very little will still have very little. On the other hand, I think increasing tax brackets for the rich could help if the government invests this extra money to those that require it.
Overall, I think some inequality is necessary and important however not to this extent. There cannot be a huge gap between the poor and rich. As the world is becoming increasingly interdependent and interconnected it is now vital to understand inequalities on a global scale and create a fairer world. Figures from Oxfam show that the world’s eight richest men now own the same amount of wealth as the poorest half of the world. Shockingly, almost half of the world’s population live on less than £5.50 a day. This can never be justified and it is the responsibility of the government to ensure the way income is shared is just.