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SECTION 1 2 3<br />
EXTREME INEQUALITY<br />
machines; and that technology and an increasingly globalized market have also<br />
enabled companies to shift a lot of low-skilled work to developing countries,<br />
further eroding the wages of lower-skilled workers in developed countries.<br />
The myth is that all of this drives a relentless and unavoidable increase<br />
in inequality.<br />
However, if this myth were true there would be little difference in the<br />
development of job markets in individual countries. In fact, while Germany has,<br />
to a large extent, resisted the mass export of jobs and the explosion in wealth<br />
and high salaries at the top, countries like the USA and UK have seen highlevels<br />
of erosion among mid-level jobs and huge concentrations of wealth.<br />
Similarly, Brazil has managed to benefit from globalization while reducing<br />
economic inequality, whereas other countries, such as India, have seen<br />
big increases in inequality.<br />
So, while technological change, education and globalization are important<br />
factors in the inequality story, the main explanation lies elsewhere, in<br />
deliberate policy choices, such as reducing the minimum wage, lowering<br />
taxation for the wealthy and suppressing unions. These are, in turn, based<br />
on economic policy and political ideology, not on inevitable and supposedly<br />
elemental economic forces.<br />
MYTH 7<br />
Extreme economic inequality is not the problem, extreme poverty is<br />
the problem. There is no need to focus on inequality and the growth<br />
in wealth for a few at the top, as long as poverty is being reduced for<br />
those at the bottom.<br />
This is a widely held view, that the focus of development should be confined to<br />
lifting up those at the bottom, and that any focus on the growing wealth at the<br />
top is a distraction.<br />
Extreme economic inequality not only slows the pace of poverty reduction,<br />
it can reverse it. 314 It is not possible to end poverty without focusing first on<br />
extreme economic inequality and the redistribution of wealth from those at the<br />
top to those at the bottom. On a planet with increasingly scarce resources, it is<br />
also not sustainable to have so much wealth in the hands of so few. 315 For the<br />
good of the whole world we must focus our efforts on the scourge of extreme<br />
economic inequality.<br />
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