Introduction
This article draws heavily on a commentary in Ram & McRae’s 2013 Budget Focus. One of the issues identified in the segment of the commentary dealing with inequality, a companion of poverty, is a National Minimum Wage for Guyana. Since then, the Minister of Labour announced a National Minimum Wage for the private sector of $35,000 per month, $8,000 per week or $200 per hour. I have not seen the report of the committee appointed by the Minister of Labour which made the recommendation, but it would be interesting to learn of the statistical, economic and social factors that could inform the anomaly of a private sector minimum wage that is considerably lower than the public sector minimum wage.
Another issue dealt with in the commentary was education and its relevance to poverty. Well, in an ironic twist, in what is now more than a rumour, a senior government official is selling their Pradoville 2 house for more than two hundred million dollars, an example of inequality whereby land belonging to a poor community can be expropriated and handed out to the politically powerful to be enriched.
It is not that inequality is a uniquely Guyanese phenomenon. In fact, a couple of years ago, four then famous and powerful men ‒ Hu Jintao, David Cameron, Warren Buffett and Dominique Strauss-Kahn – who would not usually have a lot in common, were all worrying and warning loudly about the dangers of a rising gap between the rich and the rest. Mr Hu put the reduction of income disparities, particularly between China’s urban elites and its rural poor, at the centre of his pledge to create a “harmonious society.” Mr Cameron said that more unequal societies do worse “according to almost every quality-of-life indicator.” Mr Buffett, one of the world’s richest men, has become a crusader for a higher inheritance tax, arguing that America risks an entrenched plutocracy without it. And Mr Strauss-Kahn argues for a new global growth model, claiming that gaping income gaps threaten social and economic stability. Mr Buffett may be surprised to learn that we abolished our inheritance tax, which we called estate duty, as a form or economic recovery.
Continue reading “The rise of inequality”