Herbert Sweet

Herbert Sweet

Sunday, August 21, 2011

The Income Gap

There has been a lot of chatter lately about the growing gap between the rich and the poor here in the US and, now, that gap is seen as growing in the UK as well and responsible for the current social unrest there.

The gap between rich and poor has also been growing in China yet China, unlike the US and UK has seen great economic and social progress in the past few decades.

So it would seem that the income gap is a conundrum.

The gap in the US and UK is accompanied by a negative economy overall and in China – just the opposite.

What we are seeing in the West is the exportation and automation of labor with the benefits going to the rich leaving the middle and lower classes less well off. But in China, we are seeing the creation of wealth with benefits accruing across the board.

So the answer is that the wealth gap, in itself, is not the source of discontent. Instead, it is how that wealth gap affects the overall population.

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