Narrowing the income gap has many dimensions

By Earl Bousquet
0 CommentsPrint E-mail, March 14, 2011
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'Narrowing the income gap' isn't something you hear many governments promise. In fact, I don't know many that either promise, or deliver, on this desirable objective everywhere that the income gap is too wide for national comfort.

Not that it doesn't matter. It does. Very much. But it's not that easy to achieve.

Meeting this important objective requires certain objective factors, the most important of which being that those promising it have the ability to deliver.

In the Caribbean, for example, governments' ability to narrow the income gap is limited by their inability to either set real incomes or locate income-generating enterprises or productive forces.

Essentially, in most of the island-states, governments set national wage levels, but it is the private sector that decides where it will locate its enterprises – and that decision is hardly based on income levels in the location.

In most cases, location is decided by the level and number of concessions the government can offer the investor by way of exemptions from payment of taxes.

Foreign investors (particularly) also tend to negotiate such terms and conditions that allow them to pay low wages while rejecting or resisting demands for better wages.

With governments either unwilling or unable to "narrow the income gap", people needing or wanting better incomes do the next best thing they know: go to where it is.

The best known example is the rural-urban drift, which is as much a reality in the Caribbean as it is in China – or anywhere else. The resulting urban pressures and related problems are known everywhere this drift occurs.

Another equally prevalent but hardly mentioned aspect of "narrowing the income gap" is that of taking the shortest cuts to move from rags to riches.

This aspect can be as inventive and industrious as it can be criminal – and it drifts both ways, rural to urban and vice versa. Many rural folk start small and grow big by din of sheer grit and sacrifice. But many too, driven by the dazzle of bright lights and life in the fast lane, also opt to "Get rich quick, or die trying".

Between those who choose to work hard to "earn" more money and those who prefer to take shortcuts to "make more money" are those who start new small businesses.

"Starting a business" is what most young persons leaving school without university degrees most opt for in the Caribbean. Invariably, they'll go for that "business" that has the fastest profitable turnover.

Two distinct differences between the task of narrowing the income gap in China and in the Caribbean are size and numbers.

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