Checkmate the widening income and wealth disparity before class difference reaches flashpoint

The world has always been frowning at the enormous income and wealth inequality that exists. In 2018, and the trend hasn’t changed since then, three richest Americans were known to have wealth equal to half the American population. In India, the richest one per cent own more than 40 per cent of the country’s total wealth.

One of the reasons behind the rising inequality is the huge disparity among the salaries of CEOs and ordinary workers. Some studies in 2021 have shown that on an average a CEO was drawing 399 times more salary and perks leaving hardly any salary increase for 90 per cent of the work force. Globally, we also know that huge tax cuts and sops in the name of incentives for growth have accumulated more wealth in the pockets of the superrich.

Well, looking beyond what we already know, I am aghast thinking of where the worsening inequality is headed to. Although the United Nation says there has been some improvement in reducing inequality, and as per its latest estimates 71 per cent of the population lives in countries where inequality has actually grown. But let it be known that booming inequality comes in many different ways apart from income and wealth inequality.

Boarding an aircraft, you walk creepily towards the back end to find your seat in the economy class – which some have rightly termed it as cattle class. Trying to avoid the sly eyes, you pass with discomfort through the aisles in Business Class and Premier Economy. That may be the first time many of you may have encountered -- or should I say ‘felt’ -- income inequality. But it certainly will worsen as we get along.

With only 7.2 per cent of the population possessing a valid passport in India, and less than eight per cent of the population owning cars, the disparity certainly is huge. But once in a while, the aspiring class does make an effort to take the family out to a trendy restaurant for a delightful meal or take the family on a holiday looking forward to a comfortable stay in a hotel with star ratings.

This is about to change.

China, for instance, has developed a social credit rating system that asserts trustworthiness and moral behaviour of individuals. It uses a set of digital data aimed at rewarding people with high social credit score, and punishing those who do not score well. While The Guardian (June 17, 2018) compares it to an “Orwellian tool of mass surveillance” there are reports that people with low social credit score have been barred from taking flights and high-speed trains.

What began as a tool to ascertain financial credit worthiness of an individual has been expanded to cover good behaviour. Not only if you default banking systems but the data will be based on social behaviour that includes, for instance, smoking in public places, as well as ticketless travel and fake reports. In 2017, as per a news report, around 6.15 million people were temporarily or permanently barred from taking flights or trains. The very next year, the number of those barred for air travel increased to 17.5 million, and another 5.5 million could not buy high-speed train tickets.

While a low score can limit your chances of getting a permanent job, it can also limit your rights as a citizen, and that includes getting access to a luxury hotel, night clubs and spas. Some think that the social credit rating system will encourage good behaviour and compliance with the law, and on the other hand many others believe it infringes on the individual rights of citizens. Imagine if a low score and that may come from low score for creditworthiness, bars you from staying in a star hotel or stop your family from getting a table in a top-end restaurant, there is hardly an indicator that can measure the embarrassment and shame it brings to your family.

If you think that this stems from fear-mongering rather than getting closer to any reality, then a recent development in the French tourist resort of St Tropez should be an eye-opener. The mayor of the city has threatened action against some of the top restaurants that restrict entry based on one’s ability to spend. Even though there is no social credit rating in France, the restaurants screen your names against their own database and if you have not spent ‘enough’ during your last visit, they do not allow you to get access to a table even if the restaurant is not full. These expensive restaurants are often visited by celebrities and global jet setters.

The entry restrictions are also for those who do not leave ‘enough’ tip for the waiters and for parking.

For any tourist wanting to get a taste of an upswing restaurant in the sought-after area of the French summer haunt, being rudely told that the minimum spend would be $ 2,000 per head can itself be disappointing and outright humiliating. The taste of mouthful humility that growing inequality leaves you with is discerning if not painful. That is why the Mayor of the city is contemplating strict action against these restaurants for indulging in ‘racketeering’ and bringing a bad name to the city.

Sooner or later, whether we like it or not, there would be an increased bureaucratic pressure to extend the CIBIL score that measures financial credit worthiness of an individual, to also cover good behaviour.

It began that way in China, where the credit score was launched in 2007 and later expanded to award people with good behaviour. According to reports, the 1.35 crore population has been brought under the social credit ranking system.

The rich-poor divide is therefore slowly getting to a bigger social divide that can cause moral turbulence. The divide has always been there, but was not so aggressively pursued. The middle class or let’s say the lower middle class had always avoided entering high-end hotels or restaurants, but now asking even the aspiring middle class to stay out if they do not have ‘enough’ to spend, is like burgeoning the already existing gulf.

Widening income and wealth inequality had so far created a class difference between the haves and have-nots, but restricting the taste, comfort and opulence of the Richie Rich only for those blessed with deep purse strings, may be going a little too far.

(The author is a noted food policy analyst and an expert on issues related to the agriculture sector. He writes on food, agriculture and hunger)