Combating social inequality

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By FERNANDO NOGUEIRA DA COSTA*

The right considers inequalities natural, while the left defines itself by the search for social equality because it does not consider it natural

Left and right ideas are terms referring to positions on the political spectrum. Left-wing ideas are defined by the search for social equality because they do not consider it natural. The “luck of the cradle”, for some, with quality of life and strong inheritance, imposes a compensatory policy for others.

Its main concern, then, is the promotion of social and economic equality. The left seeks to reduce income disparities and provide equal opportunities. To this end, it believes in more active intervention by the State in the economy to correct inequalities and guarantee social services, such as health and education, for everyone.

Its focus is on protecting social rights: it defends civil rights, gender equality, LGBTQ+ rights, and other social rights as a fundamental part of social justice. For social change, it supports progressive policies, such as equal marriage, environmental policies, and social inclusion measures. It seeks to create a fairer society, where benefits and burdens are shared more equitably.

In contrast, right-wing ideas are based on considering individual inequalities to be natural. Individualism emphasizes individual responsibility and autonomy, arguing that individuals need freedom to pursue their interests without excessive interference from the state.

Hence its main concern is to defend the free market by imposing a limited role for the State in the economy. It presupposes that free initiatives are efficient means of social allocation of scarce resources, that is, “the competent ones establish themselves”. This would preserve the individual freedom of entrepreneurs. Economic liberalism believes in the effectiveness of the free market for economic growth and innovation.

To control revolts and protect the private property of a few, the right focuses on maintaining social order and security. It emphasizes the importance of tough law and political authoritarianism to maintain social stability. Its social conservatism leads to the maintenance of traditional values. It is associated with the preservation of ancient moral values, including issues such as family and religion.

When the left in government analyzes the main policies to reduce social inequality, they realize that it is a very complex challenge, requiring a multifaceted approach with its multiple interactive components. To promote greater equity and social justice, he usually preaches the redistribution of income flows, when he is unaware that the inequality of wealth stocks (financial and real estate) is much greater – and more difficult and risky to be threatened.

To get an idea of ​​income distribution in Brazil: half of the workers have income below the median of around one minimum wage, the average income for everyone is R$ 2.921, a graduate in Higher Education at a good public University initially receives around 5 minimum wages (R$6.600) and enters the decile of the richest 10%. With a master's degree you earn around R$9 and with a doctorate you earn R$13.200 (10 minimum wages), entering the group of the richest 5%. At the end of his career (already elderly), he reaches 30 minimum wages (R$ 39.600) and is in the one hundredth of the richest 1%.

It is worth noting that 70% of public servants receive less than R$5, 20% up to R$10, 5% up to R$15, 4% up to R$27 and the remaining 1% up to R$ $41.650. Company CEOs, in turn, receive an average annual remuneration of R$15,3 million, including, in addition to “salaries”, bonuses. This amount is 2,9 times the amount received by the other members of the Board, who reach an average of R$334 thousand per month, that is, an annual salary of R$4 million, without considering bonuses.

The data from Global Wealth Report 2022 point out, in the previous year, Brazil had 266 thousand millionaires. The average wealth of the richest Brazilians was as follows: 1% had R$4,6 million, 0,1% around R$26,3 million – and 0,01% only R$151,5 million!

ANBIMA, in mid-2023, registered 157 thousand accounts Consulting with an average of R$12,8 million; In the Traditional Retail segment, there were 133 million accounts with an average stock of R$13.272 (one minimum wage). High Income Retail had 15 million accounts with an average of R$100 thousand. Evidently, this per capita average is misleading, as many elderly people from the Upper Middle Class become millionaires in reais without reaching the income bracket. Consulting of dollar millionaires.

Although the influence of social movements can expand with democracy, this rarely happens to the detriment of powerful interest groups. In fact, these groups organized into lobbies benefit more from democracy compared to larger groups without political organization for collective action.

Democratic governments spend on social programs aimed at those in need. At the same time, it maintains the interests of groups that are numerically small but have great political power. This contradiction becomes more acute in Frente Amplio.

The left fights for the implementation of progressive tax policies to tax higher-income individuals more and provide tax benefits for lower-income individuals. But the National Congress bars or does not implement it quickly, for example, the taxation of profits and dividends and the change in the regressive tax structure.

Income transfer programs aimed at more vulnerable groups also play an important role in reducing poverty, as well as providing access to quality education with investment in comprehensive and accessible educational systems. This includes ensuring quality preschool education, access to well-equipped schools in all communities, and scholarship programs for low-income students. The quota policy in public universities is an excellent example.

The implementation of universally accessible health systems (such as the SUS) must be accompanied by equal quality for all. Universal access to health care, medicines and preventive services contributes to reducing health disparities and, by extension, gaining the physical conditions for job opportunities.

The labor market must be inclusive, with the promotion of policies to combat discrimination in the workplace and guarantee equal opportunities. Initiatives to reduce gender and minority pay gaps are examples.

Regarding labor, the strengthening of unions for collective bargaining seeks to guarantee fair, beneficial working conditions and adequate benefits. This helps to balance power between executives at the top and workers at the bottom.

The development of housing policies, to guarantee affordable housing for all, is perhaps the most effective means of increasing the wealth (“home ownership”) of low-income families. This includes social housing programs, regulations to prevent real estate speculation and incentives for the construction of affordable housing.

It must be accompanied by facilitating access to credit and capital for entrepreneurs from low-income communities. Initiatives to promote entrepreneurship and small business development can contribute to the creation of wealth in disadvantaged communities. It doesn't solve the problem, socially, but it helps many. The implementation of social inclusion programs, addressing specific issues faced by marginalized groups, such as people with disabilities, ethnic minorities and LGBTQ+, is not appreciated by the right. But it is a civilizational issue!

Anti-poverty programs provide direct assistance to vulnerable individuals and families. This may include food assistance programs, subsidized housing, and child care services.

Finally, ensuring environmental equity for low-income communities prevents environmental pollution and promotes access to healthy environments with sanitation. Generally, the combination of all these approaches is necessary to achieve significant results in reducing poverty and/or social inequality.

I can also mention employability and professional training to meet the demands of the job market; the adequate minimum wage; social security and safety nets for low-income families; unemployment insurance and pensions for essential financial support; promoting financial inclusion through access to banking services and microcredit; support for the development of small businesses and entrepreneurship through training programs, access to credit and tax incentives; implementation of policies for sustainable rural development, including investments in infrastructure and diversification of the local economy; guaranteeing access to technology and connectivity with the promotion of digital inclusion.

Although it is politically unfeasible to approve an explicit policy of deconcentration of income and wealth in the National Congress, these public policies of the elected Executive Branch are adapted to the specificities of the current context. Implicitly, affecting several components, they lead to achieving the strategic goal.

*Fernando Nogueira da Costa He is a full professor at the Institute of Economics at Unicamp. Author, among other books, of Brazil of banks (EDUSP). [https://amzn.to/3r9xVNh]


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