Income inequality iniquitous
Recently, Trevor Munroe, executive director of National Integrity Action, demonstrated that the income gap between the top and bottom wage earners is getting wider in Jamaica, based on data published by the IMF (May 2013). Jamaica has a higher level of income inequality than Haiti and every other country in this hemisphere, excepting Suriname. Munroe quoted a Gleaner 2013 report of two top executives of one of our banks who were paid $4.5m per week, while the average weekly earning of wage earners in the financial services was approximately $12,000 per week; a difference $4.488m or a multiple difference of 375 times!
The question Munroe asked was: is our economic system fair to all?. He challenged the audience of Rotarians to correct the system by reminding them that Jamaica has achieved greatness in many areas but not economic justice.
Munroe showed that Jamaica has excelled in many areas. Jamaica gains high marks globally in many areas such as in the independence of the judiciary, we are in the top third of 148 countries; in the strength of our auditing and reporting standards - top three; in the eradication of so many communicable diseases, like malaria and polio, we are tops; in health and wellness, we rank above the United States (Social Progress Index 2014); in press freedom we invariably top not only the United States, but also Canada and the UK. We also abolished slavery before the United States, Cuba and Brazil and we achieved adult suffrage before USA and passed laws to protect women on maternity leave, requiring equal pay for equal work between men and women before most developed countries. However, we cannot get our economic system right concerning income fairness.
Our income inequality is iniquitous but apparently it is not a concern of trade unions, churches, politicians and private sector. It is as if it is a given, as if it is healthy for the economy and an inevitable consequence of a market capitalist economy.
Not so everywhere
However, it is not so every-where. In a recent conversation with the Argentinian ambassador to Jamaica, Ariel Fernandez, he stated that in Norway, the top salary in an organisation cannot be more than 15 times the lowest salary. He should know because he is married to a Norwegian.
Norway has five million people and in 2013 its GDP US$512.6 billion and GDP per capita of US$ 65,189. Jamaica with 2.7 million people has US$14.36b GDP and GDP per capita of US$5,562. Norway with a lower income disparity is more prosperous. If Jamaica could narrow the gap in its income disparity, perhaps it would achieve greater economic growth.
What are the implications of low wage earners? They will not be able to access benefits from National Housing Trust (NHT) and own a house. Low wage earners will not be able to purchase goods and services and improve our aggregate demand and economic growth rate. Low wage earners will not have a pension plan, hence 90 per cent of Jamaican wage earners have no pension plan. It means a few persons and few companies will get thousands of requests daily to help worthy causes.
This is the season of Advent in the Christian Church when we highlight Mary's hymn, The Magnificat, which tells the tale of the reversal of fortunes. As we celebrate, may we be challenged through reversal of fortune economics to greater income parity for the prosperity of the country.
Let us deal with this iniquitous income inequality.
Rev Devon Dick is pastor of the Boulevard Baptist Church in St Andrew. He is author of 'The Cross and the Machete', and 'Rebellion to Riot'. Send feedback to columns@ gleanerjm.com.