Widening inequality gap will hurt CI economy
(CNS Business): The gap between the “haves†and the “have-notsâ€, which is squeezing out the middle classes, combined with technologies that are cutting white-collar jobs could soon have detrimental impact on the Cayman Islands economy. Speaking at the recent Fidelity CEO conference, Anwer Sunderji said “global wealth has become dramatically unequally†and the gap is widening.
Despite a more upbeat presentation this year at the annual business event because of the gradual improvements in the global economic crisis, Sunderji, Chairman and CEO of Fidelity Bank & Trust International Limited, pointed to emerging trends that Cayman, like other jurisdictions, will need to face.
“For several years we have pointed out that only a well-educated and skilled workforce will be able to compete on the world scene,” he said. “Outsourcing for tasks which can easily be delivered by the lowest bidder over the internet will continue – no work permit required.â€
But with the growth in the wealth of the richest 1% of the world’s population, who now own more wealth than the poorest 48%, the effect of rising income inequality with inevitable increases in technology paints a sobering picture and presents more problems. As technological innovation develops further, employment will decline because people will do more with less. Automation is expected to replace 45% of jobs in the US in the next 20 years and those jobs will be the ones previously held by the middle classes.
Global economists are predicting a world divided between low skilled, low paid service jobs and highly skilled, elite jobs. “Everything else is potentially vulnerable,†Sunderji warned.
With income inequality predicted to get even worse in the coming years, wealth management may be a core Cayman industry, but as that the middle class is getting squeezed, the international banking sector catering for the haves is cutting back on the middle class jobs to serve them.
“At a simplistic level, if much of the middle class in the US is no longer able to afford destination vacations, our island economies will surely suffer. But of longer-term concern is the fact that grossly inequitable living situations are inherently politically unstable.When people feel they have little to lose, they are willing to risk it all,†he warned.
Category: Economy, Employment, Finance, Local Business
