How much does economic inequality cost? Two new studies

Two new studies attempt to take a look at the cost of inequality. The first and most quantifiable, of the two attempted to measure the actual economic cost of inequality in the UK.

The Equality Trust thinktank looked at statistics related to the impact on health, wellbeing and crime rates. They estimated that the annual cost to the British economy was £39bn a year.

According to the Guardian:
"Researchers pointed to the fact that the 100 wealthiest people in the UK have as much money as the poorest 18 million – 30% of all people – and said that the consequences of such unusually high rates of inequality needed to be acknowledged by politicians..." more
Of course this is a UK study, not Canadian but at the moment we have a Prime Minister who doesn't like research, or studies, or statistics (odd for someone who can barely complete a sentence without mentioning his economics background). At any rate, we're unlikely to get our own study anytime soon. The point is that, yes, economic inequality costs money.

The second, less quantifiable but less optimistic, study was actually funded by NASA. The research by the US National Science Foundation-supported National Socio-Environmental Synthesis Center found that "industrial civilisation could collapse in coming decades due to unsustainable resource exploitation and increasingly unequal wealth distribution," according to the Guardian.

...Elite wealth monopolies mean that they are buffered from the most "detrimental effects of the environmental collapse until much later than the Commoners", allowing them to "continue 'business as usual' despite the impending catastrophe." The same mechanism, they argue, could explain how "historical collapses were allowed to occur by elites who appear to be oblivious to the catastrophic trajectory (most clearly apparent in the Roman and Mayan cases)."
The researchers in the second study looked at past civilizations and how they fared at times when natural resources became scarce and economic resources were disproportionately in the hands of a small minority.

This research, combined with a recent study showing that 47 percent of US jobs will be automated within two decades paints a fairly bleak economic picture for the west (and the rest too).

Over the next decade or two we have to find a way to share the wealth, end poverty and drastically reduce inequality. We have to do all of this while, at the same time, reducing our consumption of natural resources, while the population and life expectancies increase.

Somehow I do not think that the Harper Governments Economic Action Plan is the solution we need. It only seems to create jobs for people in advertising who make commercials for the Economic Action Plan.

Of course I haven't heard any real solutions from the Liberals or the NDP either. I think it's time for everyone in every party, in every country to learn the term basic income supplement, or something very like it.


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