THIS is with reference to the article ‘Trade unions’ new challenge’ (Feb 6). The wealth and income inequality narrative has been ongoing for several decades without anyone actually addressing the problem the way it needs to be addressed.

In the corporate world, the gap in income, and, consequently, wealth, goes up every year because of the simple reason that annual increments are based mostly on the same percentage increase across the board. Therefore, if the decision is to give a 10 per cent annual increase with effect, say, from Jan 1, the top gun in the organisation who makes Rs100 million per annum (many persons actually make much more) will get an increase of Rs10 million in his annual salary; or Rs833,333 per month. On the other hand, a person on a lower rung, whose total annual salary is, say, only Rs600,000 will have an addition of Rs60,000 over a year; or Rs5,000 per month.

Just one increment, as we can see in this real-life example, causes an inequality worth over Rs9.9 million in annual income and over Rs825,000 per month. This is how the wheel moves in the corporate world, constantly widening the wealth gap.

Unfortunately, the decision-makers do not address this simple issue by giving a higher percentage of salary increase to low-income groups and a much lower percentage to high-income groups. They do not do so because it will affect themselves the most.

The bottom line is that inequalities in income and wealth will never be addressed in the corporate world and elsewhere as persons with higher base wealth generate more wealth than their less fortunate brethren with lower base wealth or no wealth at all.

Name Withheld On Request
Karachi

Published in Dawn, February 27th, 2021

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