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The Main Policy Options for Reducing Global Inequalities

Global inequalities have been in existence for a long time. Even during the period when colonialism was the new world order, inequalities still existed. There has been a high level of global inequalities in terms of social and economic perspective across different societies. Global inequality makes efforts to eliminate poverty extremely hard to execute (Milanovic, 2016). Furthermore, economies are hit hard which also causes a lack of peace and prosperity, spurring enmity, conflict, and violence among the concerned states. Staging a reversal of the trend of global inequalities is ridden with significant challenges. However, there are possibilities of solutions because of some of the progress which has been witnessed. This paper discusses the possible policy options for solving global economic inequalities.

Stopping Illicit Cash Outflows

The illicit outflows of cash out of the developing countries is the reason why these nations have remained to be poor. The resource financing for many sectors of the economy remains in a poor state due to the lack of funds (Milanovic, 2016). The politicians who are in power take advantage of the situation and start accumulating wealth for themselves by use of dubious methods. The politicians mainly siphon the funds meant for development infrastructure. Social infrastructure is also mainly affected. The funds that are siphoned from the public coffers are sent abroad mostly to developed countries whereby they are invested in long-term bank instruments. After the politicians leave office, they go for their money. Most of them are billionaires at the expense of the poor common citizens who depend on the mercies of such politicians for survival. Health care provision in these developing countries is a challenge and roads and electricity are a dream that is far away from being attained. $6.6 trillion of development expenditure has already been lost through such siphoning in between the period ranging from 2003 to 2012. This money alone is sufficient to eliminate poverty, set up the necessary infrastructure and spur economic growth.

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However, there are policy options to better the conditions of these countries and prevent them from the power hungry and corrupt politicians. The policy concerns blocking the monies from these developing countries from being flown abroad. Also, any investment in overseas banks and other investment markets abroad should be cut down so that economic development is realized and eliminating this global inequality becomes a reality. Additionally, any funds invested abroad should also be recalled back to these countries. Through diplomatic interventions and well-orchestrated cooperation between the developed and developing countries, the looted funds could be returned back to these developing economies for the purposes of reducing the global inequality gap.

Charging Progressive Tax

The developed countries have some of the largest income disparities in the world (Ravallion, 2017). This is because these countries have the world's highest income earners. Although they do not have the lowest income earners in the world, the developed countries have a wide gap between the top rich and the middle-class income earners. In the 20th century, this gap was slowly falling and coming down and the expectations were that the trend would continue until the gap is negligible. Nonetheless, the trend continued until somewhere where the rate at which the narrowing of the gap became stagnant and then started reversing in the late 20th century. The 21st century has witnessed such gaps widen again which is a concern to the economists. There is a class of citizens in developed countries such as the united states of America and the whereby they earn extremely high incomes and are already established trillionaires.

The solution to this is by charging a higher tax these top earners such that they would be pulled down while charging less to the other people in the economy (Hausman et al., 2016). This only possible with the imposition of progressive tax where the top earners would be charged more and the low-income earner charged less. Economists argue that such billionaires and trillionaires should be charged a rate of tax of about 65% so as to reduce income disparities and promote income distribution.

A Global Tax On Wealth

In a bid to eliminate extreme poverty, a global tax on wealth exceeding a certain limit is suggested. This is because a majority of the people in the world fall below the middle class, meaning that they are moving towards the poverty line and some of them are already on the poverty line. More importantly, the worst of the scenario comes in when the poor are mentioned. These people are living below the poverty line, facing starvation. It is economically and socially not acceptable to have a person starving due to lack of necessary commodities such as food while another has too much of the luxuries (Ravallion, 2017). Inequality test tends to fail in such a situation. Most of the rich people in the world have acquired their wealth through corruption and other unorthodox means. However, there are situations where people have acquired their wealth in a fair way. Nonetheless, the social economic class of both these individuals is the same because they have extreme wealth.

The suggestion is that there should be an equal rate of tax for all classes of wealth owners exceeding a certain amount so as to try to distribute wealth in the best way possible. This plan should be run in every country in the world such that its implementation would be uniform and universal. Personal assets of all kinds should be taxed at graduated rates. Because it is a fact that wealth tends to accumulate as time goes by, it is advisable that there should be some fair rate of tax which would help combat the cases of extreme poverty.

Living Wages for All

Although everybody works and tries the best to earn some income to support themselves and family, there are unfair practices that have led to poverty. Some people are living below the poverty line because of some dogmatic beliefs that the boss should always earn the highest salary while the lowest person in any business should earn the least. The person who earns the least is the one who does most of the work as well as running the most difficult tasks that require a lot of manual labour (Hausman et al., 2016). In organizations, employees especially the casuals and subordinate staff are being paid very low wages that are merely enough to sustain them. These low and unlivable wages promote the lowest living standards for such people because their purchasing power is reduced substantially. More so, the employers do not want to consider the social state of these people and thus, life becomes difficult due to such oppression at work.

The solution to these problems is a basic minimum wage or all the staff who work at all departments regardless of their employment terms and status. For example, it does not matter whether they are suppliers or contractors or casual staff. This is because basic needs apply to all people. Therefore, it is necessary to enforce a living wage globally so that it becomes the standard of reference so that the dignity of everyone is respected and upheld.

Rights for Workers to Organize

The condition of extreme inequality calls for the disempowerment of workers’ organizations. This is because it is hard for workers to be oppressed as they sit down and watch. Nonetheless, there are cases whereby the threats that are sent against the workers make them retreat and tolerate oppression (Hausman et al., 2016). For example, some of the developing countries do not want to see democracy taking place in their industries. Industrial actions are taken to be the same as stealing or any other criminal offenses. Therefore, when they try to stage a go-slow or a strike, they are confronted and arrested. They are tortured and their labour unions deregistered by the government. The police are not an exception on this because wherever they try to stage a go slow, the individuals who have been involved are demoted and others sacked by the state.

Workers need a bargaining power and a direction to determine which way the go. This has been called for by the universal declaration of human rights whereby workers are given the freedom to hold peaceful demonstrations, picket and demonstrate in all the legal industrial actions if they feel that their rights are being crisscrossed. Workers have to be allowed to bargain collectively so that they are accorded better pay and their working conditions are improved. This is because, in the countries where the unions are strong and held in high esteem, labourers have the opportunity to organize into groups for a higher bargaining power. It is a fact that wherever labour unions are well organized and not intimidated or harassed by the authorities, cases of inequalities are rare.

Stopping Harassment at Work and Other Abuses

Many companies including multinationals have learned to mistreat their workers under the guise of maximizing profit while minimising on the expenses (Hoynes, & Patel, 2015). These companies have gone ahead and replaced the permanent labour with temporary labourers. Sometimes these workers are referred to as precarious staff. Their need is meant to fill in the gaps that are supposed to be filled by permanently employed staff. However, because the firms want to employ these workers on a temporary basis so that they do not pay them what is due for permanent workers, they exploit them under the disguise of casual labourers. For example, the law may be requiring that a temporary worker becomes permanently employed after the end of three months. Nonetheless, after the three months are over, the firms sack the workers and ask them to reapply for their positions so that the contract agreement is renewed afresh, with no additional perks required (Atkinson, 2015). In other instances, for example, in the united states, this situation is often referred to as misclassification whereby the employer classified the temporary workers as independent contractors while they are actually permanent employees who are being given the benefits of a temporal worker. The use of employment bureaus and other agencies, outsourcing as well as subcontracting has been misused for busing the rights of employees.

The solution to this problem is to set up a policy that outlaws all these kinds of practices such as misclassification and the use of titles to avoid being responsible such as contingent workers. There should be clear global policies that cut across all nations (Hoynes, & Patel, 2015). The united nations organizations should be at the forefront in making sure that these policies are crafted and entrenched in the constitution of each and every member to it. Employees must be given what is due to them because when this does not happen, the employer takes all the labour costs as profits. This is totally unacceptable and cannot be permitted in societies that seek global equality.

Open Trade Policies

All trade agreements have to be done openly for all countries to benefit (Atkinson, 2015). Also, with some of the nations forming cartels, it becomes difficult for other countries to have their input into such deals. This is the greed of the highest order, meant to benefit a few countries while hurting the majority. The cartels, for example, oil producers in the middle east and in Africa, operate in a way that they make sure they control the output and prices or their own gain. When this happens, the countries are likely to accumulate wealth for themselves from such deals because they extort their international customers instead of offering their products in the international markets on a competitive basis. Some of the nations have been forced to spend heavily on the purchase of such commodities sold by cartels, using the funds allocated for other sectors of the economy such as healthcare and education. This contributes to poverty while contributing to the development of the cartels’ countries.

The signing of trade agreements has to be made open for every nation to know what is contained in such trade pacts. The trade agreements being made behind closed doors have brought massive economic benefits to the concerned countries while the others are left out. The undemocratic trade agreements have prioritised corporate profits at the cost of the workers, public interest and the environment. Policies need to be crafted to allow any international trade agreements to be made in an open, democratic and accountable manner so that global inequality does not become a disaster.

Redefining Economics

Most of the economists the world has today have prioritised arcane economic theory over social economics (Atkinson, 2015). The humanitarian values have been trampled by the extreme zeal of these economists to achieve higher national and global incomes without considering the basic values. The practice of economics should be geared towards improving the livelihoods of the people. For example, there are some economists who have misadvised developing nations that operating a large budget which is majorly deficit is the way out of underdevelopment. These nations have gone ahead and borrowed large sums to build infrastructure and are now taxing their citizens heavily to pay the loans. There must be some reorganization in economics calling for prioritization of humanitarian needs.

In conclusion, policies made towards eliminating global economic inequalities must be conscious enough so that they achieve the intended purpose. More so, every nation must be willing to participate in such policies by implementing and executing them with as required. However, political will and international cooperation are quite important in reducing global inequalities.

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