In an Era of Unprecedented Wealth, How Have We allowed Income Inequality to Persist?

Income inequality has been a tale as old as time. In pre-industrial societies, income inequality

existed in the form of hierarchical social structures. Aristocracies and monarchies dominated,

with wealth and power concentrated in the hands of a few. Ancient civilizations like Egypt and

Rome had clear class distinctions between the elite ruling class and the lower working classes.

Early modern Europe saw the beginning of significant economic inequality due to the rise of

capitalism and colonial expansion. The wealth generated from colonies was concentrated

among European elites. During the Industrial Revolution, the shift from agrarian to industrial

economies increased wealth disparity as factory owners accumulated vast fortunes while

workers experienced economic hardship. The late 20th and early 21st centuries have seen a

rise in income inequality as a direct result of neoliberal economic policies that favor the wealthy.

Neoliberal policies, characterized by deregulation, privatization, and austerity measures, have

contributed significantly to growing income inequality. These policies prioritize market efficiency

and profit maximization, often at the expense of social welfare and equitable wealth distribution.

For instance, tax cuts for the wealthy, deregulation of financial markets, and reduction in social

spending have disproportionately benefited the rich while leaving the poor and middle class to

bear the brunt of economic volatility.

In 2024, approximately 288,000 people are homeless in the UK; around 130,000 of those are

children. This is a damning figure for mankind, who, despite accumulating record amounts of

wealth, have allowed such figures to exist. In 2023, the King’s coronation cost approximately

£100 million, paid by the UK public, despite the fact that the average household income in the

UK has been decreasing since 2021, and real incomes in 2024 are now under pressure due to

rising costs.

A recent trend has emerged where the rich are multiplying their wealth at the expense of poor

and low-income households. In 2023, the Conservative government reduced the top rate of

income tax from 45% to 40% for those earning over £150,000, directly benefiting the highest

earners. The Institute for Fiscal Studies (IFS) reports that the incomes of the top 1% of earners

have increased by around 10% in the past two years. While average incomes for the wealthiest

households have grown, those for lower-income groups have been relatively flat or declining

due to rising living costs. In 2024, the top 10% of households in the UK have an average income

which is about 6.6 times higher than the bottom 10% of households, an increase from 6.3 times

in 2023.

Food insecurity has reached an all-time high globally, especially in areas experiencing

genocide, such as the Democratic Republic of Congo (DRC) and Palestine. According to the

World Food Programme, about 1.9 million people in the occupied Palestinian territories are

facing food insecurity, a number which may only continue to rise due to blockades that have

disrupted food supply chains in the area. The World Health Organization reports that Congo currently faces one of the most severe food crises in the world, with approximately 27 million

people facing food insecurity and acute malnutrition.

In the United States, the top 1% are 32 times richer than the bottom 10% of households. The

ruling elite in the US hold about 32% of the nation’s wealth, a striking reflection of income

disparity not just in the West but in the rest of the world as well. In India, while the elite have

seen significant increases in their wealth, this prosperity has not been enjoyed by the rest of the

country. The bottom 50% of households in India now possess only about 4% of the national

wealth, a stark contrast to the 40% of wealth held by the nation’s top 1%, a glaring sign of

increasing income inequality in India in recent years. With disparities like these, people around

the world are finding it increasingly difficult to cope with rising costs, and many are struggling to

pay off their mortgages.

The psychological and social impacts of income inequality are profound. Studies have shown

that high levels of inequality correlate with increased rates of mental illness, lower levels of trust,

and weaker social cohesion. People in more unequal societies often experience higher levels of

stress and anxiety, which can lead to a range of health problems.

The question of how to eradicate income inequality in societies has puzzled economists for

decades. With politicians eager to earn the support of the elite, it may seem an impossible task

to redistribute income fairly, as those in charge often create laws benefiting the rich, as seen in

recent decades. This is a complex and nuanced problem that will certainly not be solved

overnight. Addressing this crucial issue may require passing laws and adopting practices that

have withstood the test of time. In an age of extraordinary inventions and technology, we should

be seeing more benefits for the less fortunate, yet the reality couldn’t be further from the truth.

Implementing progressive tax policies, increasing access to quality education and healthcare,

and promoting social safety nets are essential steps in addressing this issue.

Income inequality is not just an economic issue; it is a moral and ethical one. Ensuring a fair

distribution of wealth and resources is crucial for creating a just and equitable society. This

dilemma requires that it be solved sooner rather than later, or we may witness the fall of human

civilization.