Growing wealth inequality doesn’t bode well for India’s future
If the Oxfam report is any indicator, an unequal present implies an exponentially more unequal future, that entrenches within it some of Indian society’s greatest failings.
The policy world has witnessed the ripples caused by Oxfam releasing its Annual Inequality Report ahead of the World Economic Forum in Davos in January. Every year, this report captures staggering increases in global wealth inequality over the years. This year, the report established that the richest 1 per cent in the world have more than double the wealth of 6.9 billion people combined. Within this 1 per cent, the world’s billionaires, just 2,135 people, have more wealth than that of the bottom 4.6 billion combined.
Suffice to say, these figures point to a problem serious enough for the fiscally conservative International Monetary Fund to come out and call for resolving inequality, to protect long-term economic growth.
In many ways, India has earned notoriety for its rampant inequality that seems to grow exponentially each year. We now know that nine of India’s billionaires own as much wealth as the bottom 50 per cent of the country’s populace and that it would take the average female domestic worker 22,277 years to earn the annual pay-out to India’s top tech CEO.
Yet, while we have seen a lot of discussion around what this means for growth, there is a critical need to understand what this inequality means for the future of today’s youth. If the Oxfam report is any indicator, an unequal present implies an exponentially more unequal future, that entrenches within it some of Indian society’s greatest failings.
The burden of inequality continues to be borne by India’s women: They continue to be tasked with bearing the burden of care work, and spend — on average, 352 minutes a day for this purpose. In contrast, men put in only 51.8. As the report argues, increasing spending on social welfare could drastically reduce this burden. But there again, India continues to allocate a little over 5 per cent of its GDP to health and education.
By tasking women with unpaid care work, we simultaneously withhold their entry into the labour force. The Periodic Labour Force Survey (PLFS) 2017-18 showed a dramatic drop in women’s work participation rates, to only 16.5 per cent, while unemployment rates for the economy as a whole continued to climb. This is a reason for concern primarily because it means that fewer and fewer women are participating in India’s labour force, and that even those who do now find themselves without work.
At a time when resolving the gender wealth gap is predicated on increasing women’s incomes, this economic outlook only points to the deepening of this divide as millennial women remain both underpaid and underemployed.
Growing wealth inequality is also symptomatic of the rise of an entrenched rentier class which looks to leverage their fixed assets in the form of land and property to extract the greatest possible rents from tenants and leases. For our millennial professionals, this means that cities continue to grow unaffordable, and prospects of actually purchasing a home early in their career turns from optimistic to bleak.
With a 2019 study by the Reserve Bank confirming that housing affordability has significantly deteriorated over the last four years, it is unsurprising how millennials now choose to rent rather than bear the increasingly unaffordable burden of high EMIs.
The net effect of this damage is felt most in the country’s economic growth. Over the last 15 years, the Indian economy has successfully braved growing income-wealth disparities to chug on. However, the current drying up of demand may be symptomatic of income (if not wealth) inequality being pushed to its very limits. When the PLFS notes that 75 per cent of regular workers earn less than Rs 20,000 per month and 60 per cent of casual workers earn less than Rs 5,000, it should come as no surprise that even the employed don’t earn enough to keep the national consumption cycle going.
Current social unrest and student protests should be viewed as symptoms of this growing economic inequity. Lack of upward mobility and drastic economic slowdown has only exacerbated existing societal tensions. It is precisely for this reason that we must ensure that the campaign transcends just economics, and enters the public conscience.
By increasing social spending, changing gendered attitudes towards care work, and ensuring the wealthy pay their share, we could take concrete action towards this goal. Doing so would be critical to resolving, not only the glaring inequities of the present, but also the threat of a more unequal future.
This article first appeared in the print edition on February 3, 2020 under the title ‘An unequal future’. The writer, 23, is the Asia Democracy Network fellow at the Centre for Policy Research, New Delhi
Source: Indian Express, 3/02/2020
