better world · Real Life Economy

The vicious cycle of our new economy – Part 3. Single Income model

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The economic structure ruling the western world have a very simple set of principles. Promising the survival of the system and its rulers. In many ways, the only way the elite could promise the continuation of such an unequal mechanism, is to maintain a certain level of ignorance in the masses. For the sake of truly understand why the rich get richer while the rest stay poor, I believe it is time to open our eyes to some simple and logical principals. As I’m limiting myself in the length and complexity of each posts, the subject will spread on a few posts

The foundations of our current economic system require the existence of 3 different models, functioning simultaneity and supporting each other. “The Single income model”, “The multiple income model” and “The socio-economic separative model”. At this post we will concentrate in the first one.

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The Single income model can be defined in the following manner – A model in which an individual is supporting his existence by the creation of only 1 source of income while be committed to a multiple channel of spending. As you could figure out yourself, the majority of the population is surviving based on this model.

This kind of living is unstable and fragile. To start with, the income of the individual is the only mean of survival. While a massive imbalance exists between the channels of income/expenses. In many cases, the commitment of an individual (by contracts) to rents, bills and services put a high minimal price tag on the monthly required income of the person in questions.  In case a mathematical equilibrium exist between the income to expenses (Income= expenses). The need to maintain a specific job, will be required for the sake of not defaulting the obligations. In such a model, the worker become oblige to continue his employment regardless of the terms he will get.

single income model

As you can see, I did not add many trivial costs. As free time hobbies, alcohol, cigarette, kids, vacations unexpected expenses and so on. The fragility and inflexibility of this model is clear. Logically, to maintain such a system for a long period in a safe manner will require the income to constantly be higher than the total expenses. Moreover, it is crucial that the employment itself will be secure, for all the period of the individual life. A reality of employment that do not exists in our generation.

Looking on the market of our days, the capacity of an individual to keep his job for a long period is limited. The general expenses are constantly rising due to inflation and our growing need for consumerism. In the reality, in such a model the capacity to save money is very smallIn many cases, a person will require a life time to save enough money for being considered rich. The idea of taking a loan is not a solution. The only thing that it does, is adding a momentary income for the sake of paying it back with interest. Which is another expenses in the balance.

This model promise survival, as one will manage to live in many cases comfortably as long as he cooperates with the system. From the other side, it is exactly this long-term cooperation that is needed for the sake of promising the survival of the elite and maintaining their enrichment.

Does it make sense to you? Can you identify your self-working based on this model?

This post is part of series, describing in simple world the economy of our days.

Share with me your thoughts. Awareness and open conversation are the keys for the creation of a better future.

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