The Wages of Inequality

Apr 01, 2011 Editorial

Karl Marx, who knew a thing or two about the causes and consequences of inequality, once pointed out that it was not necessarily poverty that generated discontent: it was the comparison with those that surround us.
If a man has a hut in a village of small houses that’s not a problem, but once a “palace” springs up next door, the small house becomes a “hut” and the canker of disgruntlement is born. Even if the man is also able to improve his house, once “the neighbouring palace rises in equal or even in greater measure, the occupant of the relatively little house will always find himself more uncomfortable, more dissatisfied, more cramped within his four walls.”
And this is the situation we find ourselves in today in Guyana. There are some who shout that “the rich are becoming richer and the poor becoming poorer” but we do not believe this is strictly accurate. What is actually happening is that while the “huts” of the poor have been improved somewhat, the ostentatiousness and luxuriousness of the palaces of the nouveau riche that have sprung up in the last two decades are so glaring that the poor cannot be blamed for concluding that they are fast going backwards. And the winter of their discontent correspondingly lengthens. With this acknowledgement of perceptions of deprivation being generated in relative terms, it is not surprising that social scientists have worked out a measure so that we can move beyond mere subjective criteria. They came up with what is called a “GINI index” that measures the degree of inequality in the distribution of family income in a country.
Without going into all the mathematical technicalities, the scores for countries in the world today range from 25 for the Scandinavian countries (the best) to 50 for the worse – some sub-Saharan countries. Less, by this measurement, is better. The last score we received was 43.2 back in 1999, and as we all know, matters have steadily gotten worse in the last decade. We’re probably right up (down?) there with sub-Saharan Africa. Interestingly, this latter designation has earned us another dubious distinction to go along with the Jim Jones tragedy as our international signifier. Last November, noted columnist of the New York Times, Nicholas Kristof, following developments in his country complained: “the United States now arguably has a more unequal distribution of wealth than traditional banana republics like Nicaragua, Venezuela and Guyana.” Less we misunderstand the implications of our unequal income distribution we should remember that the median income for the US is $43,000 while our per capita income is a measly $2,600 (in US dollars, of course) according to the World Bank.
This means that the average Guyanese is supposed to be making GY$10,000 per week, which we know is not the case by any stretch of imagination. Most Guyanese have to subsist on much less than this – which confirms our 33% that live in “extreme poverty” – defined as surviving on less than US$2 per day or GY$2,800 per week.
While we do not have the comparable figures for Guyana, we suspect from the evidence in front of our eyes that the distribution that skews the average upwards cannot be very far from the US figures that scandalised Kristof. The top 1% of the population takes home almost 24 percent of income of the national income and CEO’s routinely take home over 500 times the wages of their average worker.
What makes matters ever more galling in Guyana (and obviously precipitates more discontent and frustration) is that the high flying top 1% is found more in the corridors of government than in private industry. The latter can at least plead that they are manning the “engine of growth” for the country. How can the average Guyanese accept that a Minister, or even a Permanent Secretary, that is supposed to be a “servant of the people” can in a few years put up houses (plural) that are each worth multiple millions? Are we creating the path to uprisings predicted by Marx?

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The Wages of Inequality

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