A new pamphlet, “Why Inequality Matters” (pdf), from the Centre for Labour and Social Studies (Class) and My Fair London presents key findings from The Spirit Level and shows that only by narrowing income differences can we improve the social and psychological well-being of whole populations.
There is a powerful tendency for policymakers to concentrate efforts on tackling the symptoms rather than the causes of socially dysfunctional societies. A generation have been told inequality does not matter, what matters is improving living standards, social mobility and striving for equality of opportunity, but since 2008 this theory has become obsolete.
The after effects of the ongoing economic recession have seen inequality increase. The wealth divide between the richest and poorest in society has increased with real wages falling by 7% in the last two years and the personal fortunes of those at the very top continuing to rise.
At the more unequal end of the rich, market democracies are societies like ours and the USA, where the incomes of the richest fifth are 8-9 times greater than the incomes of the poorest. At the more equal end are societies like Norway, Japan and Sweden where the richest 20% in each country have incomes only 3-4 times bigger than the poorest 20%.
The new Class pamphlet “Why Inequality Matters” (pdf) presents the key findings of The Spirit Level and shows too much inequality results in the familiar signs of ‘broken societies’. Worse health and lower life expectancy, more drug problems, violence and teenage birth rates are all evident. Child well-being is compromised; there is more obesity and mental illness, more people in prison, and less social mobility.
Central to these problems is the loss of cohesion in more unequal societies. There is a consistent tendency for societies with smaller income differences to be friendlier and more cohesive: community life is stronger, people trust each other more, homicide rates are lower and there is less bullying among schoolchildren.
And it’s important to recognise the benefits of greater equality are not confined to the least well off and the differences are huge, and can’t be explained by levels of poverty within each country, or by the health and behaviour of minority groups. In fact, the vast majority of the population do better in more equal societies.
Even well educated, middle class people with good incomes are likely to live longer, be more involved in community life and less likely to suffer violence, while their children are likely to do better at school, less likely to take drugs and less likely to become teenage parents.
So how does this work?
Central are the stresses and insecurities which go with higher levels of inequality and steeper social hierarchies. Greater inequality increases status competition and status insecurities about how we are judged by others. This adds to consumerism as people try to keep up with each other. It makes it feel more important to have money and so leads people to work longer hours in more unequal societies.
Inequality also increases the strains on family life and parenting. Greater inequality leads to more violence because, as status matters more, people become more sensitive to common triggers to violence such as being disrespected and looked down on.
The research presented in “Why Inequality Matters” (pdf) suggests rich countries have got to the end of the social benefits of economic growth and rising material standards. Further improvements in the real quality of life now depend more on the quality of social relations in society than on higher levels of consumption.
The evidence suggests that by narrowing income differences we can improve the social and psychological well-being of the whole population, an exciting prospect when our need for new economic models and environmental restraints on growth are pushing in the same direction.