The gap between rich and poor in countries like the United States is growing rapidly, where the top 1 per cent earn 19 per cent of its total income. In fact, the top 0.1 per cent hold almost as much wealth as the bottom 90 per cent. China, meanwhile, ranks very low in terms of the world’s richest countries, yet has the second highest number of billionaires in the world, the richest 10 per cent controlling a greater share of wealth than in the US. Productivity and GDP have continued to grow worldwide, while job prospects and income have faltered. Computers and robotics are gradually replacing the lower-skilled workers, while corporate profits have been rising for the same reason, making this growing digitalisation positive for workers with special skills and education. As inequality becomes more pronounced, the middle
class is being hollowed out, and is shrinking. In the US, the percentage of households earning 50 per cent of the average income has decreased from 56.5 per cent to 45.1 per cent between 1979 and 2012. Another reason for increasing wealth inequality is the role that capital plays. Traditionally, the retail sector has driven the financial sector, but increasingly the reverse is true, with financial holdings and assets growing while ‘real’ asset bases and total GDPs are shrinking. It is expected that a $27 trillion GDP growth will therefore be supported by a $300 trillion growth of financial assets, meaning there will be a lot more capital available. It is likely that most of the new capital created will come from China, which would, at the same time, be chasing a decreasing number of investment opportunities.
How would younger customers not being able to afford your products and services affect your business?
What would increases in both income and social inequalities mean to the products and services you are selling?