According to this week’s contributor, on average, the world’s top 1% in the income distribution saw a threefold increase in incomes between 1970 and 2008, yet the salaries of the bottom 90% remained stagnant.
This stark inequality is the subject of this week’s article which follows on from last week’s by looking at income inequality and the ways in which it can be alleviated.
In contrast to last week’s article though, Malte Luebker assesses the ways in which redistributive government policies in the form of taxes and transfers rather than minimum wages, can be used to decrease the level of inequality. By focusing on the “secondary distribution of disposable incomes”, some countries, especially European countries such as Finland and the Netherlands have had favourable results from the use of taxes and transfers as a means of offsetting inequality. With the use of redistributive policies, they manage to move from levels of inequality that are almost equal to or more than those found in countries such as the United States to levels much less than that.
It would seem obvious then that in order to offset inequality, redistributive measures that would ensure a more equitable share of income for all would be implemented. This does not always occur because, according to Luebker, the impact of redistributive policies depends on how responsive public policy is to the demands of voters and in turn, who the voters believe is responsible for the redistribution of wealth. In countries where they believe it is the responsibility of the government, there have been more favourable outcomes, while in countries where people believe in upward social mobility, the results have not been so good. Luebker concludes that the union movement and the ILO should use its power to garner support for social justice to ensure a more equal income distribution.
Malte Luebker is a Working Conditions Specialist with the ILO’s Conditions of Work and Employment Branch (TRAVAIL) in Geneva. His main research interests are wages and income distribution. Prior to joining the ILO, he was a lecturer in Political Science at the Martin-Luther-University Halle-Wittenberg (Germany).
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