Introduction: Neoliberalism
The neoliberal notion by Monbiot that people have more or less what they deserve is, in my opinion, very true. He argues that particular aspects are ignored when doing valuations; for instance, an educated man is more prone to be richer than one who is not educated (Monbiot, 2016). Therefore, their education is the impetus factor that guarantees them success over others. It is erroneous to compete against them or do economic evaluations of these two groups of people who have different privileges as if they were the same. The concept is applicable to Italy, my home country and could not be more among countries.
Countries in the African continent harbor the most mineral resources. Arguably, they need to be the richest, but this is not the case. The countries have left for the underdeveloped and developing because they cannot harness the mineral resources independently. Other countries from other continents refine the mineral resources and sell them at high prices. For instance, crude oil from Africa has been refined abroad and sold more expensively to them again (Enwereuzoh et al., 2021). As a result, they do not get what they truly deserve. Notably, the neoliberal notion that people have more or less what they deserve is not far from the truth in real life, Italy, and other countries.
Monbiot also discusses the difference between earned and unearned income. In his definition, unearned income accrues without effort and includes rents and interest, whereas earned income has to be labored for to earn (Monbiot, 2016). In his postulations, such include salaries and wages which are earned differently. The underlying factor is that hard work is the backbone for both earnings. Arguably, those who inherit unearned income must have had their predecessors work hard, so are those who earn interest. It is not practical to earn interest unless a deposit emanates from hard work. In my opinion, both the earned and the unearned income spring forth from hard work.
In the same way, they should be passed through similar treatments within the economic systems. For instance, both the earned and the unearned income should be taxed in the same way; this intervention would be functional in helping to bridge the gap between the poor and the rich. Otherwise, economic disparities are in the offing because bearers of the unearned income are mostly the rich instead of the poor.
The Levels of Income Inequality and Wealth Inequality in Italy
In order to understand the wealth distribution in Italy, it is necessary to understand the history of its GINI coefficient. The GINI coefficient provides a mapping on how income among residents of the country is dispersed or distributed. Records document that from 2004 to 2017, there has been a steady increase in the GINI coefficient (Varrella, 2021). This means that there has been a steady increment in income inequality, in which case the poor get poorer, and the rich continue to amass wealth and live in affluence. When the GINI coefficient is zero, the country’s income distribution is perfect. When the GINI coefficient is 100, the implication is that the economy is represented perfect inequality. For example, in the year 2004, the GINI coefficient for Italy was 34.5, and it rose to 35.9 by the year 2017 (Varrella, 2021). This increment in the index of the GINI coefficient is a marker that there is an increasing level of income inequality within the country.
Another measure of resource distribution among citizens of Italy, which can be used is the Palma ratio. By definition, the Palma ratio is the share of income allocated to 10% of the individuals with the highest possible, disposable income divided by 40% of individuals who receive the lowest income. Contextually, higher Palma ratios depict very high inequalities, and the reverse explanation is also proper. By 2014, it was documented that Italy had a Palma ratio of more than 1.0 (Omic, 2017, p.21). This was the thirteenth position of all the neighboring states regarding high inequality. In 2018, the Palma ratio for Italy clocked 1.26, which is a slight increment from the 2014 statistics (Income distribution database, 2018). This essentially means an increment in the level of inequality since, by its definition, the higher the Palma ratio, the worse the inequality.
Manifestation of Economic Inequality in Italy
In Italy, research documents that inequality presents itself in many ways. There is intergenerational inequality, gender inequality, inequalities in income and wealth and regional differences. On income and wealth, families that are living in extreme poverty have doubled in a decade to 6.9% by the year 2017 (Pastorelli & Stocchier, 2018), p.6). There has been a decrease in the average net worth per capita to €87.451 from €88.625 in 2014 (Pastorelli & Stocchier, 2018), p.6). In intergenerational inequality, the age group of between 25 to 40 years is prone to being worse economically than their parents and grandparents irrespective of their advantaged education. On gender parity, more educated men have jobs than women. However, 50% of women receive earnings from work compared to 62% of men (Pastorelli & Stocchier, 2018), p.6). For the regional disparities, the people living in the Southern part of Italy are the most economically disadvantaged. 10.3% of the poverty level in Italy emanates from the South, according to Pastorelli and Stocchier (2018, p.6). These are some of how inequality presents itself in Italy.
Arguably, the living conditions have not been the same for all of the people living in Italy. For the same reason, there are inequalities in the various classes as having been identified in the afore-discussion. Some are learned than others, and some come from privileged backgrounds; there are Italians who have job opportunities, whereas others do not. This setup is the norm in most countries. It is notably evident that the circumstances of the groupings are not the same, and the lived experiences of either side of the groups could not be the same at all.
During the COVID-19 outbreak, a containment measure has sent people exercising social isolation and lockdown measures. Such measures limited economic activities for almost every employee, either employed or self-employed, and activities that would lead to economic improvements were largely reduced (Bonaccorsi et al., 2021). Thus, for some time, there was equilibrium in the economic sector such that all of the groups that generally experienced extreme inequalities had a bridging of their various gaps.
The Factors that Push Inequality
One of the significant factors that have propelled the inequalities in Italy is the political decisions. Political decisions have factored in radical changes in the distribution of power between the South and the Northern part of Italy. As a result, the concentration of power and consequent advantages has been accorded to the North more than the South leading to economic disparities. Additionally, political decisions have formed trade unions within companies (Pastorelli & Stocchiero, 2018). This intervention has had the impact of soliciting wealth to be easily accessed by the rich. Therefore, factors of production can be accessed by the rich of the Italian society advancing the levels of inequalities within the borders of the country.
The second reason why the level of inequalities has risen in Italy can be traced to the increased power of capital over the available labor. According to Pastorelli and Stocchiero (2018), some policies were introduced both by the government and employers to promote labor flexibility, resulting in fragmentation of the labor income. Rather than optimizing the human resources, these policies made labor more individualistic hence reducing the value over the capital. While people put in a lot of effort to work, most of them receive minimal pay for the same amount of work that, before such policies were introduced, would fetch a fortune for them. The benefactors are the employees who happen to be the owners of the factors of production. The same story replicates itself in that the rich continue to get richer while the poor get poorer. The general phenomenon contributing to the increment in the levels of disparities, particularly economic disparities in Italy, is that the factors of production are held in the hand of the rich. Capital, land and labor are easily accessible to the poor.
To curb inequalities within the country, Italy is implementing new labor laws that generally fight against precarious employment. For instance, contracts that would run for three years are currently getting renewed in two years to provide room for most employees. In addition, the national strategy for sustainable development has been put forth to implement policy changes and oversee coordination and coherence in revitalizing the economy and reducing inequalities. Unfortunately, these committees have not yet drafted a plan to function in the same domain (Pastorelli & Stocchiero, 2018). Thus, to reduce inequality in Italy, labor laws can significantly help.
My Opinion
In order to reduce income inequalities, apart from the already stipulated measure that Italy is using, I would recommend additional measures. Firstly, a revision of the taxing system so that those who earn more have an increased tax to pay compared to those who earn less; a progressive tax system (Duncan & Peter, 2016). This narrative and strategy are often faulted for promoting laziness. However, it can be structured to make the taxation at a flat rate beyond a particular income. This strategy functions in an ideal manner to promote income equality. The second strategy essential in fighting income inequalities could include increasing the minimum wage for employees. When the minimum wage is increased, the low income earning people in the country receive an increment in their pay, consequently leading to a reduction in the level of inequality.
Conclusion
It is trustworthy to say that people do not always receive what they rightfully deserve, and giving an example of the African continent, they are rich in resources and yet poor in economic evaluations. In my home country Italy, income inequality is paramount and is ever increased based on the evaluations of the GINI coefficient and the Palma ratios up to 2018. There are different inequalities in Italy, such as gender, income, intergenerational and regional inequalities. The fuels of these inequalities in Italy are the political decision and the increment in the value of capital over labor. Most of the factors of production ate arguably held in the hands of the rich. To counter such menaces, Italy should review its tax system and increase the minimum wage apart from the labor policies it has already implemented.
References
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