THE SAGA OF INCOME INEQUALITY: A THREEFOLD PROBLEM AND AN UNFOLDING SOLUTION?

Abstract

Income and wealth disparity are some of the defining problems of our time. In sophisticated economies, the wealth gap between the rich and the poor is at an all-time high. Inequality developments in emerging markets and developing nations have varied, with some countries experiencing declining inequality while others continue to experience entrenched disparities in access to education, health care, and finance. The gap between the rich and the poor is expanding not only in affluent societies. Although emerging countries have achieved enormous progress in eradicating poverty in recent years, economic inequality has still risen in some of them. In certain Asian economic powerhouses, for instance, income gaps have widened. This phenomenon has also spread to Sub-Saharan Africa and a few South American countries. In both industrialized and developing countries, income disparity is merely one component of larger economic and social imbalances. What is not clear is the answer that will solve this problem once and for all. The major pressure that the Covid-19 pandemic has put on our welfare systems, as well as the potential contribution of artificial intelligence to increasing inequality have given new relevance to the demand for a universal allowance scheme. It is in this setting that we intend to examine, firstly, the ethical foundations of Universal Basic Income (UBI); secondly, the benefits and issues of a basic income scheme, both at the level of the concept of equality and — as much as possible — from an empirical standpoint; thirdly, the two essential aspects which must be tackled before an UBI is implemented, namely generational wealth and taxation.