Income Distribution: Fair or Unfair?

One of the goals of an economic system is equity or fairness. But even if all markets are perfectly efficient, there is still a chance that the end result is not fair. Here in the Philippines, there have been arguments about this equity thing. First and foremost, our leaders should best exemplify this fairness needed in economic growth but it is also the main reason why we are now considered as one of the poorest country in South East Asia. Most of our leaders are engage in graft and corruption. The slow improvement in reducing poverty has been attributed to unequal distribution of income and resources. Government has been focusing on the realm of income distribution and wealth redistribution for economic growth. These two have been regarded as indirect measures of well-being. But how do we account for income distribution? It is based on the actual income earned by a household. This income may be derived from salaries or wages received in exchange for labor, from property and from government. Economic growth depends on accumulation of human capital, physical capital, inventions and innovations. Income distribution should manage the rate of poverty in our country. Poverty is a condition of having fewer resources or less income than others within a society. An improvement in income distribution is accompanied by a decrease in the poverty rate. But there are instances that even the income distribution causes the increase of poor people here in the Philippines. We know for a fact that income varies depending on the job of a person. Two workers might have the same working hours but do not have the same salary because of the growth in skills needed for a particular job. It may be also due to the educational and technological knowledge a person has. Income also differs with the number of household members in the labor force. Thus, we can say that inequality in distribution of income rises in the labor share of income labor mobility, technological advancement and skill biased technical change. This inequality affects the poverty rate. The distribution rests on the proposition that one is entitled to the fruits of ones efforts. With this kind of thinking, there is no wonder why rich people gotten so much richer and poor people become poorer. Hence, higher per capita income implies higher welfare, whereas greater income inequality and poverty imply lower welfare. In my view point, economic turndown and corruption in the Philippines has devastating impact in the living standards. Individuals are in absolute poverty because of the below minimum wage companies give for unskilled workers which will likely result to unemployment. The extent of poverty can be also related to the control of wealth in urban areas. Some industries are highly monopolized which gives advantage to those rich people to get highly profitable, leaving others worst off unemployed. This gives rise to the growth of population below the poverty line. We, Filipinos, should be hand in hand in fighting poverty. Government should allocate and distribute the resources and national income of our country equally. We all need a leader who is unbiased and has a vision of improving our economy. Private company can revitalize our economy by creating job for masses. Monopolies should be abolished. Also, government should pushed on anti-poverty programs and improve more its human capital free skills training and the like. Moreover, investing in education is a good deal in attaining an efficient economy. We could also start maximizing all the resources we have to be profitable. Effectiveness in whatever we do measures the attainment of our objective equity in our economic system, growth of the economy and reduction of poverty. It is a matter of how appropriate our goals are and how we manage our resources in achieving that goal. Thus, this lead the society to a higher standard of living.