سلام و مرحبا


أقوم المسالك، مدوّنتكم لما وراء الأخبار السّياسيّة و كلّ ما يهمّ الشّأن العام.

Friday, June 29, 2012

How a wide income gap squeezes happiness



  Even though economics is much about the study of ways of increasing welfare, studies of the effects of widening income gaps in the developing world are often watering down the negative effects claiming that the “trickle-down” effect is bound to happen at some point in the longer run (“when we are all dead” Keynes).
A much more subtle argument waiving income gap as a substantial threat to development, is that the bulk of people in most lower developed countries LDC have witnessed increasing incomes even though much of that wealth has accumulated in the hands of the few richest. In other words the situation of the entire groups concerned has improved in terms of income.
Nevertheless a more “obscure” negative effect is undermined by this dialectic: The effect of income gap widening on the collective happiness. It is obscure in the sense that it would be difficult to establish objective quantitative measures.
The Idea came to me at a pre-graduation party with my schoolmates in Italy. Almost all my Scandinavian friends were wearing the traditional graduate’s hat. One of them, from Denmark, told me jokingly that with this very hat he can do whatever he wants to do: work in a restaurant, travel or even study biochemistry.
But in that innocent joke lies the essence of a very fundamental economic difference between most developing and some developed countries: Income gap “width”. In fact the differences (or the genii coefficient for the matter) in wages between the highest and the lowest paying jobs in Denmark is actually negligible compared to that in my home country of Tunisia. According to the CIA’s GINI index table, published as part of the “world fact book”, Tunisia ranks 63 with a 40% gini index while Denmark only comes in rank 137 with a much lower income disparity represented by a 24.8% gini index.[1]


And this fact has serious implications not only on the job market structure but on the entire perception of one’s life. My friend would have been just fine (income wise) if he had been a waiter. For him opportunity is not a rare and colossal chance but it is the norm. Thus my friend will go on a gap year: He will work for a few months and then go on to travel and meet friends and plainly just relax. That is not the case for only my friend, but generally for the whole generation of Scandinavians! And I hope the reader is not mistaken, the school he is about to graduate from is an International institution and yet his “ambitions”, even though greatly open and flexible, are “easy” and simple.
Now if we consider mine and my similar companions’ case. Almost all my friends from LDC will go on to study a “Hard” science or course in an American College. In this we are very lucky as the USA’s higher education’s system is rich and can accommodate many international students on very high scholarship coverage. This is the case for a very lucky (because the number of talented “poor” people will always be less than the number of “poor” people selected to study in a world class higher institutions) elite of LDC students, and still the difference in life prospects and style will differ: The constant “threat” of expulsion or simple removal of scholarship will push these students to perform as best as can be performed when it comes to academia matters. Upon completion of education there will be a haunting quest for a job in the country of study or the MDC in general. This quest will go beyond simple search for the best work conditions possible: For “us” it is also about family honor, about skipping some steps of the social ladder and at the base of it all for pure survival.
Consider now, the overwhelming majority of people in LDC: The majority that did not get lucky enough to study or rather escape to a MDC. In this arena, everybody still wants and strives to be doctors, engineers, ministers and most likely presidents (if they are lucky to be in politically developed LDC in the first place). Firstly that places enormous pressure on the weak higher educational institution. Secondly, all “technical” manual jobs related schools are viewed by society almost as a pre-jail school. I recall that a middle school, in my natal Tunisian city of Bizerte, is branded with the very degrading nickname of “Donkey school” (literally and in English). It is denoted so just because an entire generation ago it was home to a technical school. At the end of the educational very competitive process, economies that are largely based on primary and secondary sectors are not suitable to accommodate the influx of university graduates. From this emerges a very peculiar “structural underemployment”: There are too many wannabe doctors and presidents and there are only a few posts to fill. The Tunisian university graduate unemployment figures are one of the most daunting examples of this catastrophic turnout. Most likely most of the undesired graduates will end up doing the simple jobs anyway: this time around, they will be untrained and their existential satisfaction will be forever shattered.
What we have here is a far too large number of underemployed depression-prone somehow young but still wasted very central years in the alleles of corrupt universities: and that is a catastrophic turnout is. A wide income gap produces the carrot (well-paying jobs) and the stick (manual low paying labor). This is equally as disastrous in outcomes to the society as a whole. For the risk is placed on the existential wellbeing of the whole society. 

2 comments:

Unknown said...

bonne analyse de la situation

Unknown said...

This explains the situation of nowadays, grate article !