The rich get richer
This phenomenon of growing disparity between rich and poor, which began around 1980, has accelerated with the crisis
Perhaps it is an exaggeration to say that we are on the brink of World War Three, as some are beginning to argue, but a number of global organizations are now speaking of burgeoning inequality as the greatest risk that we are facing. The World Economic Forum, the IMF and the OECD have already warned of the dangers of this drift, in which the rich are few and ever richer, while the poor are greater in number and are seeing their incomes diminish. The gap is widening. In the United States, the data is scandalous. According to The Economist, the richest one percent of the population has gone from holding 10 percent of the wealth to 20 percent over the last 30 years.
This phenomenon of growing disparity between rich and poor, which began around 1980, has accelerated with the crisis. Amid the depression of recent years, the average salary on Wall Street has risen by 17 percent, to 281,000 euros. Pay levels in the financial sector keep rising, even as layoffs are carried out elsewhere.
Only Latin America, and great areas of Africa for which we have no data, are exceptions to this scandalous trend. While wealth grows and is concentrated out of all proportion, the middle classes and those below them are becoming drastically impoverished. This is a dangerous and immoral drift, in which Spain's position is a conspicuous one. The Gini index, which measures the gap between the rich and the poor, has shot up since 2008, making Spain the most unequal country in the euro zone. Governmental policies have been breaking down one of the most important achievements of Spanish democracy: the welfare system that put Spain high on the international ratings of general access to wealth, education and healthcare.
Poverty in itself does not generate enough malaise to set off any major conflict. It is inequality and intrinsic injustice that cause the worst tensions. Latin America owes much of its past instability to the fact that it ranked (and continues to rank) ahead of the rest of the world in terms of social inequality. Behind this summer's violence in the South African mines lies the fact that 80 percent of the world's platinum reserves are in that country, while the population gets no benefit from them.
Poverty in itself does not generate enough malaise to set off any major conflict. It is inequality and intrinsic injustice that cause the worst tensions
The situation is explosive. In South Africa, as in Greece and Spain, unemployment now affects a quarter of the active population. These are countries, however, where huge fortunes and stratospheric salaries exist. And now to add to that there are economic policies that, like rain showers, a section of society accepts as something natural.
On the same day that Oliver Wyman estimated the Spanish banking industry's restructuring needs at 53.745 billion euros, on many radio talk shows we heard nothing of the unbearable weight of these mismanaged banks that have lost (or siphoned off) these huge sums, and now require bailouts. What was talked about was the fact that the welfare state has become unsustainable. This being the government's current mantra, the obvious result is an unjust transfer of wealth from the taxpayer to the banks.
The good news is not that the international financial organizations have suddenly turned into NGOs, which are sensitive to human suffering. The news is that these organizations are waking up to the fact that social inequality, as well as being a time bomb, may hinder economic growth. This, for example, is the view of the IMF.
So then, for whatever reasons, we may not be on the brink of World War Three, but rather on the threshold of a rectification: one that is urgent if we are to prevent worse damage, even for the rich. Economic policies have to change, and they cannot go back to forgetting the fact that to implement repeated cutbacks, which erode education, public healthcare and social services, is the worst mistake that a government can make.