Does Society Get Richer?

It would seem that what is needed for a comfortable and calm (peaceful) life? Roof over your head, stable income, covered rear in case of emergency, funds for your favorite hobby – whether it’s working with wood, electronics or driving a car through the forest. An illusion is created that it’s not connected in any way with politics or class struggle. Any economic shocks are random and are committed only by negligence of the current (bourgeois) government, and news like “the rich get richer, the poor get poorer” – only merit and the fault of the rich and the poor themselves.

However, how can a worker become richer when the lion’s share of his earnings goes to basic needs: housing, food, clothing, medicine and education? In order to “earn” something, you need to invest something, but nothing remains for investments – and the vicious cycle of poverty comes out, which is very difficult to break alone.

Imagine the wealth of society as some 100%. We keep in mind the global economic growth rate of 3.3%. At the same time, Oxfam1 indicate that the total wealth of billionaires since 2010 has increased at a rate of 13% per year, and workers’ salaries are only 2% per year. And now let’s imagine proportionally the wealth of these two layers of society – it is obvious that the distribution of wealth goes more and more towards the rich and the “slider” tends more and more towards the workers.

The impoverishment of workers – is an implacable, objective process that has nothing to do with our desire or unwillingness to talk or think about it. But society is becoming richer and the worker is also as much as 2% per year – where is the impoverishment of the workers?

The fact is that according to the International Monetary Fund2, the global average inflation rate is 3.6%. In total, it turns out that, with the general growth of the economy, workers lose over 1.6% of the real wage per year each year, along with inflation. And the rich, on the contrary, get richer by about 9.4% every year, which is 6.1% faster than the economic growth rate itself.

We understand that these calculations should be clarified for each region in particular, since inflation in Europe fluctuates around 2.5%, and in Russia – about 4.5%, but salary in monetary terms varies differently. The meaning remains – the owners of capital are getting richer faster than the economy as a whole is growing – both in percentage terms and in absolute terms, which indicates that they are getting richer at our expense, workers.

1Oxfam (Oxford Committee for Famine Relief), Richest 1 percent bagged 82 percent of wealth created last year – poorest half of humanity got nothing (link).

2Inflation rate, average consumer prices. Annual percent change (link).