Innovations of technology was supposed to level the playing field for everyone, are-we-there-yet? Just before this year’s World Economic Forum starts in Switzerland, Oxfam has released a report on income equality in the world. According to the report (“An Economy for the 1%”), the top percent of the world’s population owns more than the next 99% combined. It gets worse, the 62 wealthiest people on the planet own the same amount of wealth as 50% of humanity.
Examination of the Oxfam data showing the distribution of the wealth in the world, reveals something very profound is happening. Since the turn of the century, the pace of income inequality has actually accelerated rather than stabilize. During this time period, the wealth of the bottom half of humanity fell by more than a trillion dollars, a decline of 41%. That’s because humanity’s poorest half received just 1% of the total increase in global wealth since 2000, while the other half went to humanity’s top 1%.
Our brightest has led us to believe technological innovation would prevent this from happening. But despite new exponential technologies, Internet penetration in the developing world, and technologists’ attempts to bring new educational approaches to the poorest parts of humanity, technology has, apparently, had no impact on addressing income inequality.
In fact, based on the Oxfam report, it’s possible to make the case that technology, while it has helped some out of extreme poverty, has somehow made income inequality worse.
One might submit, this glaring income inequality could be the result of wealthy individuals not paying their fair share of taxes, clever wealth management consultants and offshore tax havens. But to imply such a large inequality in income is the result of the wealthy stashing their money where tax collectors can’t get to it, seems unlikely.
However, there’s an aspect of the report that should be troubling for technologists – the relationship between capital and labor. The report says, “One of the key trends underlying this huge concentration of wealth and incomes is the increasing return to capital versus labor.” So company owners and investors are always going to do better than the traditional 9-to-5 office worker.
WEF founder Klaus Schwab, in an Associated Press interview in Davos, said that the “Fourth Industrial Revolution” brought about by new exponential technologies could widen the gap between rich and poor. “Those who are entrepreneurs, who have talents, will push innovation – will gain from the revolution – and those who are on the other side, particularly in service positions, will lose.”
But wasn’t technology supposed to level the playing field between someone in Bangalore, India and Bangor, Maine? To some extent it has, a large number of people have risen out of poverty, something Oxfam concedes. The number of people living below the extreme poverty line was cut in half. The problem is that not enough wealth trickles down below.
Even within the United States it is possible to observe the potential impact of technology on income equality. Think about robotics and automation, where technology is eliminating some jobs, while boosting the return on capital of the people owning those factories. As a result of this tech progress – the rise of the sharing economy and emergence of companies such as Airbnb and Uber – there’s also a growing sense that the structure of the economy is changing.
Some have even suggested that we’re seeing the emergence of a fully-employed, underpaid slave economy. That may be overstating things quite a bit, but what does it say about income inequality when formerly high-paid white-collar workers are transformed into part-time dog-walkers, drivers, and hotel proprietors.
Read Article (Dominic Basulto | washingtonpost.com | 01/21/2016)
Some of this report basically states the obvious, but solutions for this trend are hard to come up with and would be even harder to implement.
But one factor towards addressing this alarming trend is an improvement in society’s overall knowledge of technology and its impact on their life. One can no longer sit-back and talk-the-talk, change begins with you, the individual. Never before in human history has this been more important.
This digital Era is all-pervasive and it’s up to each individual to get a little tech-savvy for their own wellbeing and that of their loved ones.
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