Towards curbing inequality

The World Inequality Report 2022 – released by Paris-based World Inequality Lab – showed that 1 per cent of Bangladesh’s population holds 16.3 per cent of the total national income in 2021, while the bottom half holds 17.1 per cent.

The report made public on December 7, however, revealed that 20 per cent national income in India is held by the top 1 per cent. The latest iteration of the index further showed that 44 per cent of Bangladesh’s total national income is held by only 10 per cent of the population. While the figures did not change much from the previous year, it showed how income inequality has been rising since the 1980s. In 1981, the share of pre-tax national income of the 1 per cent of people was 11.8 per cent, while the bottom 50 per cent held 20 per cent wealth.

It is not surprising that the level of inequality has been on the rise, thanks to a string of reasons active in our fiscal and financial fronts. Achieving huge wealth is not a crime, nor an offensive act. Rather, businessmen and industrialists are legally allowed to amass wealth through fair means. No state in the universe discourages accumulating wealth, as the wealthy ones contribute more in taxes and employ people in their business entities. Then, how can policies strike a balance between letting people become wealthier and reducing inequality in society?

There are a few set principles for combating inequality. First comes the enforcement of a living wage for workers. The government should establish and enforce a national living wage, and corporations should also prioritise a living wage for their workers. Low and unlivable wages are a result of worker disempowerment and concentration of wealth at the top – hallmarks of unequal societies. As human beings with basic needs, all workers should earn enough to support themselves and their families. In our country, only a few sectors now have minimum wage structures, and this needs to be diversified covering all sectors.

Bolstering human capital is the key to improving the livelihoods of people. Expanding the coverage of vocational training, computer literacy, and enhancing skills in foreign languages are some of the areas where focus should be given with utmost importance to upgrade the levels of our human resources. The decades-old obsolete education system must be overhauled to align the system to the jobs market. People themselves will improve their lot with actions. The government will only make it happen with policies and fund allocations. More investment in quality education will help develop human capital to the desired level.

Expanding infrastructure is another key area to cut inequality in society. Better roads, bridges, and more domestic airports can improve productivity and prosperity for business owners and workers alike. Digital connections to sparsely populated communities and remote belts in the country will help people augment their income levels.

Launching progressive income tax is another area where the government can focus on. Tax evasion and tax avoidance both make dishonest large taxpayers wealthier. By generating more income, the government will be able to expand more social safety net programmes, and spend more on improving major economic infrastructure.

Building assets for working families is another way to shield the lower segment of society from being financially vulnerable. Policies that encourage higher savings rates and lower the cost of building assets for working and middle-class households can provide better economic security for struggling families. New programmes that automatically enroll workers in retirement plans and provide savings could help lower-income households build wealth. Access to fair, low-cost financial services and homeownership are also important pathways to wealth.

Hence, we urge the government for programmes that will augment the income levels of poor and middle-income groups. Establishing equality in a society does not mean that a particular society or state will take regulatory steps against the rich or ultra-rich. Paving ways for making fortune in just ways should be promoted for the well-being of Bangladesh, while addressing inequality through policy interventions is of paramount importance for a peaceful Bangladesh.