Why does a cashier make less money than a Football coach?
Gaining access to wealth requires you to be rare and unusual in some important way. This can be as simple as your luck or who you are related to. It is rare and unusual to win the lottery and it is rare and unequal to be born into a wealthy family.
In a society based on capitalism, fierce competition among people is encouraged. People are encouraged to be “ambitious” and to work towards some form of success in life. People are regularly told that “hard work” leads to success. But does it? Hard workers are not all that rare.
People are also regularly told to conform to certain traditions or approaches to life. Yet, conformity leads a person to become highly replaceable. Being highly replaceable lowers a person’s market share. Just like in business, market share is a major factor dictating a person’s success in life. Market share indicates your level of abundance. Those with high market share enjoy more abundance because they provide unique value to more people.
Any business that makes it to Fortune 500 status provides a level of unique value that destroys most of their competition. This gives the business more options in the world. They have more money to fund political campaigns and influence law makers. They have more talent to choose from because more people want to work for them. They can take bigger risks because they have a strong safety net of market share to fall back on.
This dynamic plays out the same way with individual people. Some people have the freedom to live wherever they want in the world and travel as often as they like. Other people only have the freedom to choose if they want to take the bus home or walk.
When a person lacks abundance of money and abundance of opportunity, it can become a death spiral of loss. Lack of money leads to a lack of resources. This leads to a higher risk lifestyle, which can lead to decreased physical and mental health. This increases the lack of opportunity and causes further loss.
The situation is like being stuck in quicksand where every action makes the situation worse and nothing can solve the problem without outside influence. But this is the danger of too much conformity. The conformist is “common” and easy to replace, which makes them lower value in the eyes of society. Those viewed as slower value earn less money and accumulate less “wealth” as a result.
The main cause of wealth inequality comes down to supply and demand. Something in high demand and short supply becomes more valuable. Something abundant becomes less valuable. You don’t have to pay cashiers high salaries because they’re as replaceable as socks. Low wages are the result of low value. It means your skills and abilities are abundant. You are not unique or rare.