A widespread criticism of current economic trends is the growing disparity between those earning huge incomes and bonuses, compared to the average workers.
Needless to say those at the bottom of the economic ladder should be helped, but many of the objections to income disparity are misplaced. That point of view was embraced by communist philosophers, something akin to what present-day, left-wing politicians seem to be saying.
It should be noted first of all that a major factor nowadays is the huge rise in the stock market, which mainly benefited the minority who own shares. The rest of the population does not have that lever. Yet, the growing discrepancy has stirred many politicians to cry “foul.” They claim that different policies will solve this problem. Many of their proposed “remedies” would only create new difficulties.
The view that the income gap is a mistake, is bad, is backed by the fact that those in the middle class income brackets have gained very little in the past decade. Improving productivity is a good solution, but is very difficult to implement over a short period of time. Raising the minimum wage is worth doing, but limited by what a company can afford.
Corporations have been overly generous in providing rewards to their top executives, amounts that often make no sense. Much of that money should belong to the company and its shareholders. Company boards of directors must be more restrained and sensible.
Perhaps a part solution is to pay some employees with company shares balancing what the principal executives receive. Greatly raising income taxes on the top earners often does not work, as too many loopholes exist. During the Second World War taxes were raised so that upper-income earners had their pay capped to reflect shared hardship. In peace time that is a poor idea.
It should be realized that the very wealthy provide a backstop to government funding that no one else can do. Examples abound, such as medical research, philanthropy of all kinds, educational scholarships at post-secondary institutions, adding to museums, helping scientists combat climate change and environmental disasters; they all depend on funds provided only by the wealthy.
One must think carefully before sponsoring moves to income levelling. The ramifications very well could be counter-productive.