In the US, Black Friday is the name given to the shopping day after Thanksgiving Day, and more recently, the day has come to symbolise the biggest day of the shopping calendar. It was originally called Black Friday because so many people went out to shop that it caused traffic accidents and sometimes even violence. In anticipation of that chaos, in the early 1960s the Philadelphia Police Department coined the term Black Friday in readiness for the Friday following Thanksgiving Day. That said, what is the relevance of Black Friday deals in relation to the problem of inequality, I hear you ask?As economist John Black puts it, inequalities between individuals are accounted for by mainly differences in earning ability, and in property. He insists that, individuals who are economically inactive - through age, ill health, or inability to find a job, usually have low incomes and, therefore, are unable to afford some of life’s basic necessities. And so last Black Friday got me thinking; apart from the obvious large discounts offered by major retailers, what is Black Friday like from the point of view of a low income family? Thanks to globalisation, the concept of Black Friday is now popular in London much as it is in Paris, Berlin, and New Delhi. In London, the Williams family, a family of four, was among the many millions eager to take advantage of the large discounts that day. Their items of interest were home appliances; a refrigerator, a washing machine, a flat screen television and any other item that the family would not be able to afford on a typical day. And so at around 4 am, the Williamses squeezed on to a bus and headed towards the nearest super store near Wembley. It was game on! Being the only member of the family in employment, Peter is in full time employment and works as a kitchen porter. He earns the national minimum wage of £6.50 an hour, which means that at the end of the month, his take-home income is £964.56 after income tax deductions. His wife, Lisa, has been unemployed for 5 months now because the company she used to work for went into administration. Paul, the son, has just finished university and is yet to find a paying job. His current level of debt is nearly £30,000 all accumulated in student loans. Samantha, the daughter, is still in high school and does not contribute to the family’s income. In essence, Peter is the sole bread winner. For rent, the Williamses live in a local authority subsidised accommodation for which they pay just over £500 per month. They also pay £80 in local council tax. After a deduction of these overheads, the family of four is then left with a paltry £384.56 to pay for food, heating, electricity, transport, and various other expenses for a period of one month until Peter’s next pay day. This family’s story resonates all over the world, from Athens to Abuja, Washington D.C to Windhoek. So why are the rich getting richer and the poor getting poorer even at a time when it appears that our generation has better access to healthcare, education and housing in comparison to previous generations? In the UK, for instance, at the start of the recent global economic crisis in 2008, the richest 2,500 households had as much wealth as the bottom 5 million households put together. Today, that same number of households has as much wealth as the bottom 8 million households put together. Similarly, in the United States today, economic policies such as anti-regulation, small state and privatisation have seen the top 1% increase their wages by 150% whereas the bottom 90% have seen their wages increase by a mere 15% in the last three decades. To enumerate, in his book, The Price of Inequality, Joseph Stiglitz, a recipient of the Nobel Prize in Economic Sciences argues that one way to properly explain the growing gap between the rich and the poor is look at the process of rent-seeking. He observes that the use of political power to generate wealth by certain groups in order to shape government policies financially beneficial to them is where the problem begins. This process, he contests, allows the top earners in society not to necessarily create new wealth but to take the existing wealth from others. To illustrate, it is no wonder that Peter has seen his wages increase at a snail’s pace over the last 15 years, and can therefore only afford to go out to ‘spend on luxury’ once every 365 days. On the contrary, the top 1% laughs all the way to the bank 365 days a year. But then again, Stiglitz warns the rich and I concur; the fate of the rich is bound up with how the other 99 per cent live…it does not have to be this way. The writer is a UK Parliamentary Intern and holds a Master of Science in Public Services Policy.
