Did you know that the combined wealth of Jeff Bezos (the Amazon.com boss), Bill Gates (owner of Microsoft), and Warren Buffet ( the largest shareholder in Berkshire Hathaway) is equal to the wealth of 160 million of the poorest people in America?
Did you know, based on research from the World Institute for Development Economics Research at the United Nations University, the top 1% of the richest people in the world have controlled about 40% of the wealth in the world?Â
These are the iceberg phenomena of what so is called economic inequality. This phenomenon of inequality does not only occur in America but also all over the world, including Indonesia.
There are many forms of economic inequality with various dimensions, and some of the most important is income inequality and wealth inequality. Economic inequality does not only exist between individuals or groups of people within a country but can also occur between countries within a region, for instance between ASEAN countries or even between countries in the world.
Generally, socialism countries or countries with left-wing legislative tend to have better economic inequality than liberalism countries or right-wing legislative. There are many ways to measure and compare economic inequality between countries, some of the most widely used include the Gini Ratio and the Adjusted Human Development Index.
Let a country as a car and economic growth is its speed, then economic inequality is like naughty holes or bumps on the road. Once we face these holes and bumps, we have the option to break them quickly so that we can fastly arrive. But, time over time, the car becomes easily damaged. The bolts can be dislodged one by one. The tire is leaking, not to mention if the car engine can hit the bumps. Make you spend money to go to the car service station. Likewise with economic inequality, although in the short term it may not have much effect, in the long term inequality has a catastrophic effect on the sustainability of economic growth.
Impact of Economic Inequality
An economy that is suffering from severe lameness will infect various aspects. The community will experience various kinds of social problems. According to research, countries with severe economic inequality have a higher crime rate than countries with better inequality. The rates of homicides, detentions, drug abuse, and so on tend to be higher. Not only that, but economic inequality also affects the level of household debt. How come? Because people in these countries tend to force themselves to follow a lifestyle above their level, beyond their income.
Economic inequality will also affect the level of social cohesion and cause social inequality. People with high economic inequality tend to live in groups. They prefer to live in a group that is 'on his level'. The poor people will socialize with other poor people, the rich family with the other rich family, the successful businessmen with the successful businessmen too.Â
An Indonesia proverb said that "Api Dalam Sekam" or Fire in the Chaff, where if there is even a little friction it will cause social and political instability. People, as the subject and object of development, becomes selfish -- they do not care about their community and country. As a result, the government's efforts to boost economic growth and improve welfare have been stumbling. Therefore, the government must pay attention to Economic Inequality in the policies taken so as not to become a hindrance to economic growth and prosperity in the long run.
