Worldwide Income Inequality

I admire the people involved in the Occupy Wall Street movement for bringing attention to some serious flaws in our financial system.  One of those flaws is the fact that many people responsible for our current financial problems have not had to face consequences for rigging the system so that they could bet on its failure.  Our system of investment has moved further away from realistic assessments of the productivity or profitability of an enterprise.

One of my Facebook friends works in banking.  He claims that the housing crisis and the financial collapse that followed were caused by legislation that forced lenders to make loans available to people who could not pay the loans back.  Although they have not used the exact words, he and other Facebook friends have made comments that lead me to believe that they think the people occupying Wall Street are operating under a sense of entitlement.

Income inequality is an important issue to address, but I get the impression from some things I read that some members of the Occupy Wall Street movement need to be reminded that no one owes anyone else a job.  Businesses hire people to do jobs because they think they can make a profit from the work that gets done.  If a worker is paid more than the revenue brought to the business as a result of the work done, that worker will not have a job for very long.  Those who protest income inequality in the United States need to consider income inequality worldwide.  Those who claim to be among the 99% in the United States may be among the 1% worldwide.

For many decades, the citizens of the United States have made up a small fraction of the world’s population, but have consumed the majority of the world’s resources.  We take many things for granted while people around the world do without food, housing and medical care.  Improved communication technology is changing that.  Employers can now find workers around the world who are more skillful and reliable than domestic workers, and will work for much lower wages.  This means more profit for businesses that send office work overseas.  As the Chinese economy grows, more people in China can now afford to buy things that they could not afford in the past, such as beef.  A greater worldwide demand for beef will result in higher prices for beef at supermarkets and restaurants in the United States.

Even if those who occupy Wall Street are successful in reducing income inequality in the United States, addressing income inequality and consumption inequality worldwide will mean that we in America will have much less than we do now.  The Arab Spring may result in even higher gas prices.  We forget that dictators in the Middle East made it convenient for us to extract oil from their countries at low prices.  Democratically elected governments in Egypt and Libya may want their fair share of oil revenues.  Overall, we can expect to become poorer as people in other parts of the world become less poor, especially if we continue to think that someone owes us a job.  We have to have skills or products that we can sell in a global marketplace if we want to maintain our current standard of living.  Advances in communication technology will give us the chance to do that, but will also give a chance to everyone else in the world.