WeHappers· 7 min read
Decoding Wealth Inequality
Explore the complex landscape of wealth inequality, its causes, consequences, and a potential solution we're proposing in our increasingly interconnected world.
Ever contemplated the subtle ways in which wide wealth gaps could be influencing your happiness?
Today, wealth inequality is more than an economic inconvenience. It casts ten imposing, far-reaching shadows that upset societal equilibrium and personal contentment.
1. Environmental Cost.
Multiple studies affirm the unnerving relationship between wealth concentration and environmental degradation[1]. An illustration is the Amazon deforestation, exacerbated due to global demands fueled by wealth concentration. Another one shows how the gap between rich and poor people extends environmental damages on biodiversity([2]). This link escalates carbon emissions, confounds the climate equilibrium, and places our collective future and individual happiness on dangerous grounds.
2. Economic Vulnerability.
Respected international agencies like the IMF and OECD demonstrate how wealth divergences destabilize business operations, supply chains, and erode market confidence[3]. Recall the 2008 economic crisis; small businesses, without financial safety nets intrinsic to larger corporations, suffered disproportionally from the repercussions of wealth disparity[4].
3. Reduced Workforce Productivity.
Health disparities tied to income inequality can cripple workforce productivity[5]. Businesses in urban areas with high wealth gaps often face elevated healthcare costs resulting from prevalent chronic conditions such as obesity and heart disease[6]. This underscores the urgent necessity for healthcare parity.
4. Social Dislocation.
Consider the social disengagement stemming from the San Francisco tech boom, where wealth concentration led to increased social disintegration[7]. Younger generations, disillusioned with a system nurturing inequality, may disconnect, creating talent drain from conventional businesses and threatening future societal engagement and happiness.
5. Market Disruptions.
Intensified wealth gaps invite protests, strikes, and civil unrest—disrupting operations, supply chains, and shaking market confidence[8]. Consider the recent examples of protests shaking France (Yellow Vest Movement on economic justice)[9] and Chile (2019-2020 social outbreak)[10].
In the context of market stability and economic growth, instances of socio-political instability led by widened wealth gaps could cause significant financial distress and hamper long-term growth prospects for businesses according to the World Bank[11].
6. Slowed Social Mobility
Wealth disparity can curtail social mobility, leading to hardened societal divisions. A study by The Brookings Institution[12] substantiates the decline in the American dream, where only half of those born in the 1980s out-earn their parents, compared to 90% of those born in the 1940s. A report from OECD indicates that it would take about five generations for a low-income family in the U.K. to attain the nation’s average income due to the current economic disparity[13]. An International Labour Organization (ILO) case study on Brazil revealed that despite improvements, individuals from the poorest quintile only have a 1.6% chance of reaching the top quintile in their lifetime[14].
This socio economic stagnation negatively impacts individual satisfaction and societal progression.
7. Policy Instability
Concentrated wealth can lead to a disproportionate influence on policy making, favoring the wealthy and leading to instability[15]. The 2019 protests in Lebanon, for example, were sparked partially by tax policies seen as favoring the wealthy, leading to significant unrest and policymaking disruption[16].
8. Health Inequality
Wealth disparity amplifies health inequality, contributing to lower life expectancy among less affluent demographics[17]. For instance, a stark disparity exists in the U.S., where affluent men live 15 years longer on average than their poor counterparts[18]. A study finds that family differences in income and education are directly correlated with brain size in developing children and adolescents[19].
9. Education Inequality
Financial inequality also reduces equal access to quality education, stymying potential and damaging futures. In a UNESCO report, children in low-income countries are found to be at a disadvantage, with many not achieving basic proficiency in reading by the time they leave school.
10. Talent Wastage
Wealth disparity limits the full utilization of human potential. The Human Capital Report[20] of the World Bank affirms that countries aren’t investing enough in their “human capital”—the skills, experience, and effort of their people—which impinges on economic growth and general societal happiness.
Time to act
We are aware of the risks of inaction or inertia. Numerous studies and non-governmental actions indicate the directions to take. The UN has outlined the paths to follow with its Sustainable Development Goals. The same conclusion is shared by a growing number of individuals, all over the planet.
Governments are overwhelmed by the magnitude of the problems and time is pressing. Initiatives in favor of Corporate Social Responsibility and Social and Solidarity Economy are interesting economic tools.
The Wehappers program is the contribution of Happy Persons who want shifts to happen.
We provide easy and direct routes, we think tech is a catalyst for change, we build a cooperative non-profit model that encourages people to action, we measure progress, we reward engagement, we use time and knowledge as available resources, we are a growing committed community.
Happers want to live and share the Happiness Experience.
Curious to know how to live this Experience?
Know more about the Wehappers Program leading the charge in this happiness revolution.
References
[1] “Environmental inequalities” by European Environment Agency
“Linking Climate Change and Inequality” by Céline Guivarch, Nicolas Taconet et Aurélie Méjean for the International Monetary Fund.
“Capital accumulation and sustainable development in developing economies; role of natural resources development” by the Chinese academics Lei Shi and Jia Xu.
[2] “How Economic Inequality Harms the Environment” by Jame K. Boyce is a professor emeritus of economics and senior fellow at the Political Economy Research Institute at the University of Massachusetts Amherst. More in his book The Case for Carbon Dividends.
[3] “Top Incomes and the Great Recession” by Thomas Pikety from Paris School of Economics and Emmanuel Saez from University of California, Berkeley, for the International Monetary Fund (IMF)
“Making Innovation Benefit All Policies for Inclusive Growth” by the Organisation for Economic Co-operation and Development (OECD).
[4] “Why Small Business Were Hit Harder” by the Federal Reserve Bank of New-York
[5] “The Current state of research on the two-way linkages between productivity and well-being” by Andrew Sharpe and Sharhzad Mobasher Fard for International Labor Organization (ILO)
[6] “Inequality & Health” by Inequality.org shows how distributions of income impact the wealth and the health of nations.
[7] “Tech’s Bust Delivers Bruising Blow to Hollowed San Francisco” by Romy Varghese and Priya Anand for Bloomberg.
[8] “Global Trends 2040” by the American National Intelligence Council.
[9] “To Explain, to Understand, or to Tell the Gilets Jaunes?” by Benjamin Tainturier for Europe Now Journal.
[10] Social Crisis in Chile 2019 : Review of Two Hypothesis as to its Cause by Sergio Zunigra-Jara, Profesor titular de la Escuela de Ciencias Empresariales Universidad Católica del Norte, Chile.
[11] “World Development Report 2011: Conflict, Security, and Development”.
[12] “Economic Mobility of Families Across Generations” by Julia B. Isaacs for Brookings.
[13] “A Broken Social Elevator” by the Organization for Economic Co-operation and Development (OECD).
[14] World Social Protection Report 2020-2022t: Regional companion report for Latin America and the Caribbean” by the International Labour Organization .
[15] “Wealth Inequality and Accumulation” by Alexandra Killewald and Fabian T. Pfeffer from Harvard University and Jared N. Schachner from University of Michigan.
[16] “Understanding the Lebanese Protest Through the Prism of Extreme Inequalities” by Lydia Assouad PhD Student of Paris School of Economics.
[17] “Inequality: A matter of Life and Death” by Laurie DeRose for the Institute for Family Studies (IFS).
[18] “Association of Social Mobility With the Income-Related Longevity Gap in the United States” by Atheendar Venkataramani, MD, PhD; Sebastian Daza, MA; Ezekiel Emanuel, MD, PhD for Jama Internal Medicine.
[19] “Family income, parental education and brain structure in children and adolescents” by a group of 23 American academics.
[20]] “More Than Half of Children and Adolescents Worldwide ‘Not Learning’” by UNESCO Institute for Statistics.
