Sunday 11th February 2007


Wealth is there for the working

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Statistically, the average working person earns about $7,380 per month or US$13,978, per year. This is based on GDP (or gross domestic product) per capita estimates for 2006, as published in the last budget statement.

GDP per capita, is roughly a reflection of the earnings of the average worker. If the average person reading this feels satisfied that such a figure reflects his real position, then the wage is credible. If however, more people grumble that such a figure is incredible, or too large, then we need to scrutinise the disparities in wages.

On an international level, some 75 per cent of the world’s population lives in developing countries, with below average GDP per capita. So only 25 per cent of the workers make more than the average income. But they must make a whole lot more! In addition, some 40 per cent of the world’s population does not earn enough to put adequate food on the table.

GDP is a basic idea in common use that is identified with growth in the economy. It is supposed to represent the value of all goods and services that are generated within the country. In fact it is the selling price of the things we produce.

In other words all our labour is pooled together, and then equated to the goods or services we provide and a value placed on what we sell.

Economic prosperity

The economists say that is a reflection of economic prosperity. Our individual experience is irrelevant in the equation.

This is because social problems and standards of living are not necessarily easily adjusted with growth statistics. If crime levels went down, productivity does not increase, so GDP does not increase. If we had more leisure time, we would not produce more.

If our standard of healthcare was improved, we would work more hours and produce more. If traffic congestion were to be stymied, we would produce more, since we waste less time.

When we work more, we get paid more, and we need to save more. But the first off-shoot from more pay, is always more consumption.

Because we do not concentrate on saving more, we never generate a sufficient store of capital. It is like a Third World curse.

Accumulate capital

If you do not generate capital formation, you cannot expand your individual estate, you cannot become an entrepreneur, your ability to expand is constrained. You remain dependant on others to fuel your happiness.

Occasionally, when the capital can be accumulated, there are a host of other problems. One common problem in developing countries is human resource mismanagement. Another failing is a lack of indigenous ideas or innovative minds. Foreign ideas and concepts are imported to solve local indigenous problems. Further, wastage is a common fibre in the tapestry. So poor nations remain poor and rich nations grow richer.

It is not until we have the muscle to recognise that capital formation is an individual intention, and that it is a tangent off the poverty cycle that we can gather the nerve to rise up. It is in this recognition that visionary and entrepreneurial spirits and born, to be foisted upon the sleeping, who never learn that wealth is there for the working!

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