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Thursday, 7 February 2013

That Wealth Gap ...

We are frequently told that the gap between the "rich" and the "poor" in the UK is widening and becoming a chasm - usually by some extremely well paid and well funded 'researcher' working for one or other of the Left-wing "think Tanks." There is certainly some evidence that the gap between those at the very top of the tree and those at the bottom is getting wider, but this is perhaps a misleading picture, since, at least in western nations, the bulk of the populace do not live in "poverty." The actual spread of "wealth" is quite broad, and the majority of our populace actually live quite well.

The same cannot be said for many other nations, where the gap between "rich" and "poor" is a chasm - with very few "bridges" over which someone from the "poor" end of the scale can get a better share of the wealth. From the online magazine, Financial Management, I learned that the UK, US, Europe and Canada are actually not the worst places even though this is what the propagandists of the Left love to project. To my surprise I learned from their graphic, that South Africa is now one of the worst, with India, China, Argentina, Chile, the Philippines, Brazil, Namibia, Bolivia and several others - interestingly some of the former Communist territories - have much less 'distribution' of the wealth of the nation.

Certainly in the 'developed' nations one of the critical factors that causes this divergence is the penchant of the employers and negotiators of pay rises, to award 'across the board' pay adjustments on a 'percentage' basis. As any school child can tell you (assuming they've actually learned it in today's rather odd way of teaching maths) that 5% of £100 is a lot less than 5% of £10,000. So, the guy on £10,000 is going to get an extra £500 and the guy on the bottom gets just £5. If this is allowed to continue indefinitely, eventually the guy on the top end is earning a disproportionate salary by comparison to the guy at the bottom. However, convincing the middle and top earners to accept an fixed amount across the board is going to take some doing! The fact is that, if everyone got the same amount in their pay rise, the current steep incline between top and bottom would stabilise and the gap would close slowly.

However, the developing world there is another facet to this problem. In recent years we have heard a great deal about how "The 1%" deprive the rest of the populace, but the fact is that the west, roughy 10% of the current world population, are far better off and share a far better distribution of wealth, than the other 90%. Perhaps the most important reason for that is the absence, in most societies outside of what we call the "western democracies" of a large group of "Middle Income Earners." Perhaps this also accounts for the massive corruption in most of those countries where 'favours' are required in order to get some official to do what they are (under)paid to do.

Looking at some of the really slewed imbalances identified by the Financial Management graphic, there is a suggestion that some of the massive wealth discrepancy could be related to the siphoning off of "aid" funds as some are among the poorest nations on Earth. Having visited some of them, I can attest to having seen, cheek by jowl, opulence on an unimaginable scale and hovels with nothing of the modern conveniences and only the minimum of food to eat.

I think, next time we complain about the "Wealth Gap" or see a report of it and about how badly we, in the west, are faring, let's spare a thought for those who live in countries where the distribution of wealth is far, far worse. Yes, we do have people living on incomes below the so-called 'bread line,' but we also have many, many more who live very comfortably, and even our poorest are able to get help which is unimaginable to anyone living in India, the Philippines, or any one of many states in Africa.

Once again, it is a question of keeping things in perspective. Something our politicians and media don't seem to be very good at ...

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