Ralf Einert

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Studies of Economic Change

Introduction (Inequality)

"Everyone is the architect of his own fortune." "You have to be willing, then you get what you want."

Is the world build in such a simple way? Why do people work for the mere subsistence though they could receive social welfare?

The gap between the rich and the poor increases significant. The share of the people who are in danger of becoming impoverished as well as the share of the people with high income increase substantially.

This indicates that a considerable part of the population might be excluded from the use of the social structures. Therefore the causes of the increasing inequality during the life cycle of industrialised countries are analysed by having the special focus on productivity and labour demand.

It is obvious that the productivity increases according to the scientific and technological development.

As a result the demand for highly educated specialists increases. Consequently the wages which are already increase disproportionately because it is usually said that the productivity gain is based on the efforts of the top-management. But in fact the productivity gain is a result of the social structures which are mainly maintained by the common people.

Repetitive work is made redundant or is shift to low-wage countries. Unemployment is the result and wages dumping continues further. Therefore unemployment and wage dumping have to be compensated by unemployment pay and collective labour agreements. If the social development goes ahead the affected number of people increases as well.

This means:

1. More and more people are systematically excluded from the use of the social structures.
2. High wages caused by a high productivity are enabled by the social structures.
3. Poverty is the precondition for wealth, therefore high taxes and duties on high wages are according to their reason.

4. A basic income for all supplemented with minimum wages compensates this.