Income inequality is one of the major global issues talked about today. It is the bane of the working class’s existence, and, something which a great number of the 1% consecrate fervently. The two countries where this Brobdingnagian inequality is coming most to light, are the United Kingdom and the United States of America. As a result, there will not be that many figures in this article; simply theories, which I think may help solve the problem. If you do not think that income inequality is a massive issue already, take a look at these figures: the income of the bottom earners worldwide increases by only 1.4% annually, however, the income of the richest 1% increases by 2% in the same time period.
In the United States of America, income inequality increased the most among all the developed nations – the richest 1% growing by 275%, while wages of the poor grew by only 20% in 30 years. These statistics show that income inequality is not a forgotten relic of the past, nor something which we can put off nonchalantly. It is something we must fix now, and below is how I think we should do it. I would just like to thank Robert Reich before I start this, as his steps to reducing the inequality have been greatly inspirational and beneficial to my thoughts, although I do not concur with all of his ideologies.
My first solution is to raise the minimum wage, and after having done this, to index it with inflation. This will ensure that your average Joe will be able to cope with the rapidly increasing cost of living, while hopefully also having a bit of disposable income to boot. Indexing the minimum wage to inflation is an essential component to this solution, as we cannot let this simply be a Band-Aid on a broken leg; that is, we cannot let the problem lie after simply increasing the minimum wage. The solution must be an ongoing and progressive one, and indexing the minimum wage to inflation certainly ticks all of those boxes.
In addition to this, we need to make high quality childcare available to the majority of the population. As of now, high quality childcare simply costs too much for the majority of the working class to afford; and as such, inequality is simply getting worse, as the children of the rich are getting better services, and in turn, a higher likelihood of social and cognitive development, which means that they are more likely to take up the high paying executive positions than the others, whose parents were perhaps not so lucky. Unequal starting points only mean that the finishing points will be unequal as well, and we must address this problem by giving everyone a uniform starting point, meaning that people win the race based on merit, rather than a never-ending cycle of rich breeding rich. Although I do acknowledge that this problem can never be completely fixed, this solution will definitely help the problem, making sure that more people can help their children get on in life from the very beginning.
Finally, my last step to solve income inequality is to introduce fairer, more progressive taxes, meaning that we save billions of pounds a year through tax avoidance at the top. It is objectively not fair and certainly not progressive to have companies like Starbucks paying only £8.6 million in tax over the course of 14 years. The money saved from closing down tax loopholes on wealthy individuals and large corporations could be used in improving the quality of state education in the UK, or improving the quality of childcare from the ages of 1 to 5, as I mentioned above.
Moreover, many of these corporations also cause environmental degradation, so in effect, you would be killing two birds with one stone like this, reducing the gargantuan gap between rich and poor while promoting the environment. I do not in any way suggest that these steps are the only ways to reduce income inequality, nor that they will definitely work, but as of now, in my opinion at least, they certainly are some of the best options.