Poor Insights

By: |
January 20, 2016 12:25 AM

The problem isn’t the wealth of the rich, it is the disruptive changes happening in the labour market

While the critics of free-market economics will make much of the new Oxfam report that says 62 people owned the same wealth as half the world in 2015, the figures must be read with some nuance. First, many on the list of 62—including Microsoft founder Bill Gates, Facebook’s Mark Zuckerberg, Google’s Larry Page and Sergey Brin, Alibaba’s Jack Ma, Amazon’s Jeff Bezos, etc—owe their riches to the digital-age businesses they created, either by themselves or with a handful of others. There were no inherited millions aiding them to the top, no mining from the so-called “commons”. Second, the wealth of all 62—no matter, whether they have been actively involved in its creation or not—is responsible for the creation of millions of jobs worldwide, high-paying and blue-collar. A Walmart (founder Sam Walton’s successors are on the list), for instance, is the third-largest employer in the world. So, it is rather unfair to assume that the 62 have accumulated wealth at the cost of the rest. It is rather that most of whatever wealth has flowed to the masses has been created by the wealth these people ploughed into economic activities.

The real threat to the economic condition of the masses lie elsewhere. The World Economic Forum (WEF) warns in a new report that 5 million jobs are likely to be lost in the coming five years, thanks to automation, redundancy and disintermediation. Automation is already making disruptive changes—from driverless cars to software programmes that write codes—in the labour market. The e-commerce boom, while creating many jobs, is fostering disintermediation—manufacturers are being directly linked to the consumer through a portal, eliminating the need for a brick-and-mortar store, manned by shop attendants. It is not just these jobs that are endangered—the WEF report holds sectors such as healthcare, financial services, etc, could see the highest shrinkage in employment opportunities. So, the world needs to concern itself with upskilling and re-skilling those sections that are most vulnerable to the shrinking need for labour, rather than critiquing the wealth held by those creating jobs.

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