Did you know that more than half of the world’s population lives on less than two dollars a day? It’s hard to believe for many people that in our modern society so many individuals are still getting left behind financially.
However, the reality is that our prosperity is often directly linked to a positive economic growth rate. If you want to learn more about this topic, then you’re in the right place.
In this article, we’ll give you a crash course on the subject, as well as some resources to explore it more fully on your own. Let’s get started!
What Is Economic Growth?
Before we begin we need to define exactly what economic growth is. This type of growth is an increase in the number of goods or services that a country produces. This growth is often related to both the quantity and the quality of the goods.
Why Is Economic Growth Rate Often Tied to Inequality?
There’s no denying that capitalism has contributed to a boom in economic growth and prosperity. However, the competitive nature of the economic model means that many businesses need to cut costs whenever possible.
More often than not, the people who need to bear the brunt of the cut costs are the workers. These cut costs can come from a variety of areas. For example, they could involve paying an employee a lower salary.
Or, they could involve outsourcing work to a different country with cheaper labor. Or, they could involve getting rid of the human element altogether and replacing it with cheaper machines. This means that, even though a business’s economic growth is doing well, the people living in the country can still suffer.
When jobs aren’t available, or they don’t pay well, then workers can be plunged into poverty. This helps explain the relationship between economic growth rate and inequality.
What Are Some Ways to Deal With Economic Inequality?
If we want to get serious about fighting economic inequality, then we will need serious policy change to address it. Many economists say that a global tax placed on the wealthiest people in the world is one step in the right direction.
Another is to place limits on capital income. That way, there’s no incentive for exploiting the poor. Make sure that you read this article so that you can learn more about this solution to wealth and income concentration.
Want More Content? Keep Exploring
We hope this article helped you learn more about the economic growth rate and how it’s linked to inequality. As you can see, more often than not there is a direct tie to poverty levels and financial success.
Wealth is often built from the labor of people in poverty. And, while the solution won’t be simple, there is a world where everyone can reach a more equal standard of living. Did you enjoy this article? If the answer is yes, then you’re in the right place. Keep reading to find more topics that you’re sure to love.