In the world today, people are divided into different classes, and in between these classes, there are gaps in terms of income, education, quality of life etc. These gaps are what we term at inequalities. In a society such as Singapore, where most of us are in the middle income class, we are not exposed to extreme poverty, or we simply take the opportunities we have for granted, such as education or even just clean drinking water. Yes, we are aware that there is poverty in the world, but how many of us have actually given much thought about it? To be honest, I haven’t, until the lecture.
One country i could think of to illustrate the case of increasing inequality would be China. After watching the recent Beijing olympics opening ceremony held in China, one would definitely think that China is very developed and have improved tremendously as compared to the past. The opening ceremony was lavishly done, and new stadiums, facilities were built at a high cost. However, at the same time, there are others out there who still do not have access to television, internet and education.
China has gained vast economic growth over the past 25 years and this has created alot of wealth for China. Many MNCs are relocating to China to make use of China’s vast resources, such as labour and raw materials. China started their economic growth as labour intensive industries and have slowly progressed on to higher skilled knowledge based industries. This fits the Marx’s capitalist concepts whereby capitalists invest in China and decide to set up production plants in China due to the low production costs. For China’s case, the capitalist includes MNCs as well as Chinese firms. The MNCs gain more profits as a result of the lower production costs. However, the wealth is not distributed to the labourers even though profits have risen. This extra profit is only spread amongst the owners, and this wealth generated will go to the MNC’s home countries, and not China. Futhermore, the wage levels in the country side in China is also different as compared to the wage levels in the city area in China. This also causes income disparity amongst the Chinese. The chinese firms will also make use of the lower production costs in the peripheral areas of China and gain more profits for themselves. This results in increasing income disparities and inequalities amongst the Chinese and also between China and other countries.
There’s alot that can be done to solve the problem of inequality, but it will take a very long time. The problem of inequality will not be solved completely, but it can be alleviated. One of the policies in which the Chinese government can implement would be the minimum wage policy which ensures that the Chinese will be promised a minimal wage and that they will not be exploited. Furthermore, the Chinese government can encourage the firms to give the workers monetary rewards if there is more profit made.
