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Posted by Future Without Poverty On November - 16 - 2013 0 Comment
Munsingen, Canton Bern, November, 2013.

Munsingen, Canton Bern, November, 2013.

Numerous reports mention the possible elimination of extreme poverty in the world in the near future. At the same time, reports show that the percentage of people under the poverty level has risen from 18% to 22% in the last several years in the USA.
The recent mayor’s election in New York City focused upon the gap between rich and the rest of the New Yorkers that has been increasing, and some wonder if the middle class in the USA will continue to decline further. The Econonmist ( September 21, 2013; p12 ) noted : “ Americans’ income inequality is growing again. Time to cut subsidies to the rich and invest in the young.” Median household income has dropped from $56,000 in 2007 to under $52,000. Implication? Both conservatives and liberal agree this is the most fundamental political issue in the upcoming elections. Debate will be what to do about it?
“The gap in test scores between rich and poor children is 30-40 wider than it was 25 years ago.” The Economist article suggests a focus on early childhood education and more progressive taxes. With the tax code favoring the middle and upper classes, the Economist favors a flat tax. Details on this proposal would be important to follow carefully.
The Economist ( September 21, 2013, p 63 ) also provided some important data on global poverty . Poverty worldwide has declined from 52.2 million in 1987 to 20.6 million in 2010. Subtitle to this review was: “Eradicating extreme poverty is no longer a pipe dream. ” … “Between 1990 and 2010 the proportion of the population living on less than $ 1.25 a day in developing countries halved to 22% , 1.2 billion”. The biggest decline took place in China. The USA, UK and World Bank have agreed to reduce the percentage to 3% by 2030.
The Economist also noted that inequality is harder to address. The Swiss have opened up a major debate about the distribution of wealth. Conservatives claim that the gap in terms of income and assets in not widening, whereas the left or liberals claim otherwise.
Denknetz, a left wing policy institute, points out the earnings of a CEO were around six times that of the average Swiss salary thirty years ago. In 1990 the ratio was around 1 to 13. As of 2007 the best paid managers received 56 times the average salary in Switzerland. While it is hard to know whether it will pass , it is important the debate will occur and solutions to reduce inequality can be tested and evaluation in various parts of the world.
Increasing the minimum wage is being raised across the country in various cities and states. Currently there is a discussion about moving the national minimum wage to $10 in the USA.

12 x the base salary is enough- vote yes!

12 x the base salary is enough- vote yes!

On November 24th , 2013 the Swiss will vote on the 1 to 12 initiative as proposed by the Young Socialists. It calls for the highest salary for a CEO to be restricted to twelve time the lowest salary in the same company. The drug company Roche pays its CEO 13 million Swiss Francs ( over $13 million) whereas the lowest paid staff person receives 59,000 Swiss Francs , a ratio of 1 to 236. The Migro food company CEO – staff salary ratio is 1 to 17. (Jurg Muller, Swiss Review , No. 5, October, 2013.) There is a major salary gap between American Airlines CEO and Southwest Airline CEO in the US and thus the ratio of CEO to lowest paid staff is quite different in the two companies.
As you might imagine, some business leaders claim Switzerland will be doomed if the 1 to 12 initiative passes in November. They fear that Switzerland will become the “ North Korea of Europe”. Hans Fehr , former S.P. President and National Counselor , believes that “ fat cat bonuses” and top salaries are no longer based upon differences in performance levels. He feels that the 12 to 1 initiative will not pass, but that both right and left political forces will begin to address the irrationality of the bonus system in companies in Switzerland.

Future Without Poverty

About Future Without Poverty

has written 40 post for this site.

Future Without Poverty is a non-profit organization that was born through the realization that handouts were not enough to fight poverty. Simply making donations is not sufficient. Instead, sustainable opportunities are needed to adequately fight poverty.

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