According to a survey of four American economists, this is how much wealth the economy failed to create in the US alone between 1990 and 2019 because of inequality
The opportunity for each person to participate in the economy according to one’s own skills and personal effort, it is at the base of any society, not only in Brazil but in most countries. Unfortunately, in most nations as well, there are structural barriers that interfere with this right for many. Even working and trying hard, people cannot get a fair return and this is the basis of one of the biggest problems of today: inequality. There is much debate about her reasons, but the debate so far has been somewhat restricted to winners and losers. That is, who gains the most from inequality, usually the richest, and who loses the most, usually the poorest. But a study of four American economists explains that this is not the case. In a society where there is a lot of distance between rich and poor, everyone loses something.
The total of $23 trillion, or $666 billion a year, is how much wealth the economy failed to create just in the USA between 1990 and 2019 because of the inequality, according to the authors of the survey, including Mary Daly, head of the Federal Reserve, the US central bank. The losses mainly affect minorities, such as blacks and Latinos, but also women. With less possibility of earnings, these groups invest less in themselves and seek less to qualify. As a result, there is a general drop in productivity and an increase in turnover among workers and, in the end, the economy as a whole grows less than it could.
Closing that GAP, raising wages to the average of what white men earn, according to the study, would lead to a 10% gain in earnings for American workers as a whole, and a gain of more than $1 trillion per year for the economy. One thing to note is that this average loss of $660 billion is smaller and accelerating. Today, the US economy is losing $1.1 trillion a year. The study emphasizes that this disparity is not necessarily intentional. That is, it is not necessarily the result of racism or other forms of discrimination. But that needs to be fought the same. Not only because it perpetuates an injustice and causes social unrest, but also because it hurts the economy. These conclusions are valid for any country where inequality is high, especially Brazil, one of the world’s champions of the problem.
Want to organize your financial life? Check out the “Make It Up With Your Finances” course with Samy Dana. Access the website niucursos.com.br, and enter the SAMYFINANCAS coupon to get 15% off the total amount. See more information in the video below: