Inequality In Industrialized Nations

Inequality is not just bad for social justice, it is also bad for economic efficiency

Professors Richard Wilkinson and Kate Pickett, from the Equality Trust, produced an informative lecture video titled Inequality: The enemy between us? based on their recently released book, The Spirit Level; Why More Equal Societies Almost Always Do Better (Penguin, March 2009).

In the lecture, compelling evidence is presented by the two professors that once nations are industrialized, more equal societies almost always do better in terms of health, well-being and social cohesion and that large income inequalities within societies destroys the social fabric and quality of life for everyone:

As they studied the data for industrialized nations, they noticed a clear tendency for countries which do badly (or well) on one outcome to do badly (or well) on others.

They looked at a wide range of health and social problems and found that,

• Outcomes are substantially worse in more unequal societies
• The problems tend to move together, implying that they share an underlying cause
• Whether their findings are tested internationally among the rich countries, or among the 50 states of the USA, there is almost always the same tendency for outcomes to be much worse in more unequal societies.

As they note in a presentation of their findings:

• Health is related to income differences within rich societies, not between them
• Health and social problems are worse in more unequal countries
• Health and social problems are not related to average income in rich countries
• Child well-being is better in more equal rich countries
• Child well-being is unrelated to average incomes in rich countries
• Levels of trust are higher in more equal rich countries
• The prevalence of mental illness is higher in more unequal rich countries
• Drug use is more common in more unequal countries
• Life expectancy is longer in more equal rich countries
• Infant mortality rates are higher in more unequal countries
• More adults are obese in more unequal rich countries
• Educational scores are higher in more equal rich countries
• Teenage birth rates are higher in more unequal rich countries
• Homicide rates are higher in more unequal rich countries
• Children experience more conflict in more unequal societies
• Rates of imprisonment are higher in more unequal societies
• Social mobility is higher in more equal rich countries
• More equal societies are more innovative
• More equal countries rank better on recycling

An interesting point they make is that economic growth alone — which is supposed to raise the income of all — is not necessarily a good determinant of life-expectancy and well-being: individuals in some developing countries can attain a level of life-expectancy comparable to industrialized nations even when their income may be far lower:

Addressing inequality implies tackling many, many social, political, economic and environmental issues, for they are all inter-related in many ways.

(Interestingly, the data they used for the study came from the early 2000s, so are not distorted by the global financial crisis that started around 2008.)

Further below there is more about poverty in industrialized nations, but first, some more on inequality.