On income equality - kesenjangan pendapatan. Will write a bit on that. In English and bahasa Indonesia. 1st post. (http://www.kompasiana.com/cdt888 or www.cdt888.com)
It is really quite difficult to conceive that just a group of 65 people (Bill Gates and co.) can have a wealth equivalent to more than half of humanity or 3.5 billion humans. It’s not surprising. It’s not unbelievable. It’s just crazy! That figure and following the issue around the world and especially in Indonesia at the moment made me want to write about this inequality issue.
“Les hommes naissent et demeurent libres et égaux en droits.” All men are born and remain free and equal in their rights. That’s what the First Article of the French Declaration of Human and Citizen Rights adopted in 1789 after the French Revolution states.
Humanity has never gotten there. Humans are not equal that’s a fact. Inequality is everywhere. In access to health, education, property, technology or simply security, you name it inequalities are huge and have always been. Many reports have been made on those different inequality issues. Everybody knows. Acts are rare.
It’s the same with poverty. Poverty is not limited to a money issue. It is multidimensional and in fact the first sign of poverty is often lack of dignity not lack of money. Humans are complex creatures. Well inequality is also multidimensional. I will focus more on income or wealth inequality here in these “income disparity” posts.
The global issue of wealth inequality.
Around the world nowadays the issue of wealth disparity and especially widening income inequalities has become critical. In the US who has forgotten the “Occupy Wall Street Movement” against the so called 1% of people whose percentage of the entire wealth cake seems to always increase against the 99% who compose the rest of the population. Actually the 0.1% confiscate an even bigger slice of the wealth cake and so forth. You are always the poor of someone else, right?
In Europe the question is also a huge debate. The French Socialist President for instance promised the 75% tax on all revenues above one million euros per month. Although the actual application of this law is not easy and was first rejected by the Constitutional Court, it does show the great importance in society of the income disparity issue. People want action to correct this inequality.
All over the world this subject is key. It is currently one of the most important topics of the Indonesian Presidential election. How to bring more income equality in order to increase stability in the country? Yes income inequality or kesenjangan pendapatan at a certain point encourages instability. History shows it. Revolutions show it. Sometimes the display of luxury cars or buying sprees in malls is just insane in Indonesia where half of the population is still poor. It is so insane that it becomes dangerous. It creates social envy and social tension.
The Gini coefficient
The famous Gini coefficient is the reference to measure income inequality. It is a figure between 0 for perfect equality of income distribution (everyone has the same income) to 1 perfect inequality (one person has all the income). It can be measured before taxes and social transfers or after. I will provide the Gini after taxes and transfers for a better measure of real disparity. Income inequality can actually be corrected by taxes and transfers. It must be said before that the Gini coefficient is criticized by many who say one figure cannot represent reality on its own. That’s why now people are coming out with the 1% or 0.1% figures for instance. The same story goes with GDP so that’s why the Human Development Index and other figures were popularized. However it is one indicator to look at.
