The divergence of wealth continues to reach staggering inequality. With the World Economic Forum being held next week, we look at how the economic divide of the population is ever increasing.
Mario Draghi, the European Central Bank president, is about to push for a $635 billion bond purchase programme. However, if he were to give that money to each of the 507.4 million people in Europe, then that would amount to over €1,200 per person. In terms of the UK, if the over £500 billion 2008 bailout were put into every active bank account in the country, this would equate to over £10,000 per account. A recent BBC documentary has even put this number higher, at over £20,000 per person.
Oxfam and Credit Suisse created separate reports on this, both confirming that nearly half the world’s wealth is controlled by 1% of the world’s population. This shows that there is a lack of competition in the world, with vast monopolies of industries where regulation and competition laws have evidently failed.
The UK divide in wealth is all too stark. Food banks are opening up on nearly every high street in much the same way as branches of a very successful bank would do. What has caused this increase? In short, rising costs of living. We know power and gas prices have risen over the years, as has the cost of the weekly grocery run. There’s no real strain on demand but speculators are driving up the prices nonetheless. Zero contract hours have diminished a stable income base, too. No longer can a single income be enough to sustain the traditional family.
A Centre for Cities think tank report stated that “for every 12 jobs created in the South, one is lost in the North”. This is a slight generalisation as specific cities have developed very well in the last few years. Aberdeen and Newcastle were among the top 10 towns for private sector job creation between 2003 and 2013. On the other end of the spectrum Newport, Swindon, and Gloucester have seen the greatest job losses.
The question is will this divide get worse or will it even out? In all likelihood, it will get worse unless ‘Thatcheresque’ action is taken rather than tinkering with pieces of the economy.