The issue of income inequality in developing countries has become a major impediment to a country’s overall growth. The government and private employers are two major contributors to the income inequality issue. Any given country’s government should work diligently to reduce wealth disparities among its people. Such government initiatives, such as becoming a last resort provider where the private sector fails to offer employment for employees, will be extremely beneficial. Also, the close eyesight of the financial market should be another key action to be taken by the government in the due process of solving the income disparity problem among the citizens. Therefore, if the governments take certain measures, the problem of income disparity in developed countries would not surface at any given moment (Bailey, 2013). Therefore, in this research paper, the main purpose will be to discuss the various solutions to the challenge of income inequality among workers in developed countries.
Solutions to income disparity in developed countries
Enforcement of a living wage
The problem of a low living wage has highly resulted in income disparity in developed countries. As a result of the low living wage, employers who are the rich in the society have been benefiting a lot since they only spend little on wages. Therefore, the rich in the society have continued becoming richer while the poor are becoming poorer. At times, the wage that some workers in developed nations get is too low such that it cannot sustain them for a day. Despite the low living wage, the developed countries governments also impose taxes on the low living wage citizens. Through setting a standard living wage that is manageable, the governments would assist to reduce the economic gap between the rich and poor in the society (Gillies, 2016).
Protection of workers rights
Another bit that has resulted in income inequality is the violation of workers rights especially when it comes to forming unions. When working in a company, most workers in the developed countries sort to form unions to assist them in airing their concerns to their employers as well as the government. Despite the availability of the unions, the problem of income inequality has not been solved as required. The main reason for its failure is the continuous intimidation of the union leaders by the employers. The employers always fear the unification of workers since it means a threat to the survival of their companies. Therefore, the governments of developed countries should formulate rules for the protection of workers rights through their unions at workplaces (Huertas-Noble, 2016).
Better oversight of the financial market
The financial market has also played significant roles in contributing to income inequality among workers in the developed countries. When it comes to capital buffers, the cost of starting any business has highly been heightened. As a result, the employers have to control the amount of cash that they use to disperse wages to their employees. Also, the consumer protection sector is another aspect that requires keen oversight to solve the problem of income disparities in developed countries. The banking system has also played a part in the income disparity problem. For instance, the banking rate has resulted in employers and employees getting less than they thought of in the due process of banking process (Ostry, Berg, & Tsangarides, 2014).
Alternative employment by the government
The lack of employment opportunities in private firms has also contributed to the issue of income inequality among workers in developed countries. When the employees run jobless, they end up staying at home without any other option of seeking employment. The workers have to stay under the condition which further results in increasing the financial gap between the rich and the poor in the developed countries. The governments should come in and assist the jobless people in getting jobs which will in turn help in solving the income disparity problem among citizens of developed countries. The government should take certain measures such as improving in several sectors to welcome more investors into the country. By getting employment, the poor will earn income thus reducing the gap between the haves and have nots in the nation (Reich, 2017).
Banning currency managing countries
In the global market, there are some countries that manage their currencies such that their exports are made at low cost. As a result, the importers in developed countries end up spending a lot of money when purchasing goods from such countries. As a result, employers spend less on paying their workers. The low wages paid to workers continue distancing them from the rich people in the country. Also, the import prices from such countries managing their currency becomes low which in turn leads to less cash being gained by the country. Therefore, through banning the countries, the end result will be the creation of more cash into the countrys economy thus increasing minimum wage per worker (Gillies, 2016).
As pointed out in the discussions above, the problem of income disparity can be solved through certain interventions by the governments of the developed countries. The interventions mostly assist in upgrading the living standards of majority poor people in the developed countries. As a result of the interventions suggested in the paper, the gap between the poor and the rich will highly be reduced. Therefore, the developed countries governments need to approach the problem in such a manner that a majority of citizens do not struggle to sustain themselves.
Bailey, Conner (2013). Local Solutions to Inequality: Steps Toward Fostering a Progressive Social Movement. Rural Sociology, 78(4), 411-428. Retrieved from EBSCOhost.
Gillies, Benjamin (2016). Worker Cooperatives: A Bipartisan Solution to America’s Growing Income Inequality. Kennedy School Review, 1626-31. ISSN: 1535-0215 Retrieved from EBSCOhost.
Huertas-Noble, Carmen (2016). Worker-Owned and Unionized Worker-Owned Cooperatives: Two Tools To Address Income Inequality. Clinical Law Review, 22(2), 325-358. Retrieved from EBSCOhost.
Ostry, M. J. D., Berg, M. A., & Tsangarides, M. C. G. (2014). Redistribution, inequality, and growth. International Monetary Fund.
Reich, M. (2017). Racial inequality: A political-economic analysis. Princeton University Press.