Trapped at the bottom

located:	Germany, France, Italy, USA, United Kingdom
editor:	Maria João Morais

Today’s ever worsening economic inequalities are epitomised by the fact that in countries such as the U.K., U.S. or Italy, it takes five generations for a child born into a low-income family to earn the average salary. Whilst in France and Germany, escaping poverty could take up to six generations.

These figures are included in the recent in-depth international OECD study called “A Broken Social Elevator? How to Promote Social Mobility”, which confirms that low earning families are trapped at the bottom of the income ladder, whereas people from high-income households are more likely to remain at the top of the ranks. The survey also states that inequality in the world’s richest countries has been increasing since the 90s and social mobility has stagnated.

The conclusions aren’t surprising, given the growing concentration of wealth in recent decades. Today, a thousandth of the world's richest population owns 20 percent of the world's assets, while the poorest 50 percent have less than 5 percent.

To tackle rising levels of poverty, the OECD recommends increases in state investment in education, advising that “access to good quality, affordable housing, as well as transport, and improved urban planning will help reduce regional divides and concentrations of disadvantaged households in cities”. The subject of growing wealth disparity has been, moreover, worked on by several economists such as American academic Joseph Stieglitz or Frenchman Thomas Piketty. In his volume “Capital in the Twenty-First Century”, Piketty suggests that a measure to tackle this growing gap is by reducing inequality through tax reforms on wealth and limiting inheritance rights. Although these kinds of measures can be effective, they do not tackle the problem at its root, which is an organisation of the economy that promotes growth but also results in deepening poverty levels.

The statistics contradict, yet again, the myth of meritocracy sold by the illusion of constant progress supposedly inherent in the market economy. Therefore, a complete paradigm shift is still needed, placing people's well-being at the heart of political priorities, rather than a model of generating wealth that will always benefit the same small elite and thus only producing growing and stark inequalities around the world.

Call to Action

GEO: Catalyzing worker co-ops and solidarity economy