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How Inequality Hurts Societies

New global research on equality, inequality, and the happiness of nations. It’s an American issue.

An unemployed man in Singapore collects cardboard waste to exchange for money along a residential area, Jan. 5, 2011. (AP)

American inequality is at towering heights not seen since before the Great Depression. Wealth is packed at the top of the ladder, and dwindling on the rungs below.

The picture naturally makes many uneasy. A new global research effort says we are quite right to worry about it.

Two British epidemiologists say inequality is a public health issue, a national health issue. From crime rates to drug use to teenage pregnancy to heart disease and more, they say, the evidence shows inequality makes countries sick, even the rich.

We investigate inequality, and the health of nations.

-Tom Ashbrook

Guests:

Philip Aldrick, economics editor for the Daily Telegraph (U.K.) He joins us from Davos, where the World Economic Forum is taking place.

Richard Wilkinson, professor emeritus of social epidemiology at the University of Nottingham Medical School. He’s co-author of The Spirit Level: Why Greater Equality Makes Societies Stronger.

Kate Pickett, professor of epidemiology at the University of York (U.K.) and a National Institute for Health Research career scientist. She’s co-author of The Spirit Level.

Barry Bluestone, professor of political economy and founding director of the Dukakis Center for Urban and Regional Policy at Northeastern University.  Read his 1994 piece on inequality in The American Prospect – he says it resonates strongly today.

Read an excerpt from “The Spirit Level”:

Inequality: the enemy between us?

By Richard Wilkinson and Kate Pickett

As if to overcome their reputation as practitioners of the ‘dismal science’, economists are now producing an economics of happiness. Ironically, what they find is that most of the determinants of happiness are beyond the grasp of the market. Happiness, rather than being determined primarily by income and possessions, is, at least in rich countries, more significantly affected by social relationships – by friendship, marriage, giving and volunteering.

And it’s not just happening in economics. Researchers across a range of academic disciplines are discovering how fundamentally social we are. Neurologists tell us how the pleasure centers in our brains light up when we co-operate with one another, and that feeling socially excluded activates the same areas of the brain as physical pain. Evolutionary psychologists have explained how reciprocal altruism developed. Epidemiologists have discovered that health is strongly protected by friendship and damaged by low social status – findings which are backed up by research on monkeys conducted by primatologists. And psychologists have shown that the kinds of stress which really get under our skin and elevate our stress hormones are those which contain a ‘social-evaluative threat’, such as threats to self-esteem or social status, in which others may judge our performance.

Where it once took studies of babies’ weight gain to discover that they needed attentive and loving care, it is now studies of death rates which are forcing us to recognize the social needs of adults. What matters most now for health, happiness and well-being is, from early childhood onwards, social relationships, the quality of the social environment, and how we experience ourselves through each others’ eyes.

For thousands of years the best way of improving the quality of human life was to raise material living standards. But we, in the rich world, are the first generation to have got to the end of that process . The evidence on life expectancy, happiness and measures of wellbeing show that there are rapid improvements in the early stages of economic growth, but the gains then diminish until, among the richest countries, all three cease to be responsive to economic growth. The ‘diseases of affluence’ – like heart disease – become the diseases of the poor in affluent societies and, for the first time in history, the poor are fatter than the rich.

At some point in the long history of growth it was inevitable that we would reach a point where diminishing returns set in. That we have passed this point has been masked by consumerism. But what drives consumerism – and makes it an insatiable but zero-sum game – is that rather than being driven by genuine human need, it is driven by status competition, by the need to have goods that show other people how well we’re doing and to keep up with the Joneses. When a large majority, even of the 10 or 15 percent of Americans below the Federal poverty line, have air conditioning, a car and a DVD player, growth has done its work.

In their bones people know this. We know that consumerism is hollow and cannot satisfy our deeper and more important social needs. Similarly, the romantic nostalgia for the 1950s reflects our recognition that, despite our societies being so much richer, people are no happier now than they used to be.

No wonder then that Gross National Income per head has been falling out of favor as a measure of progress in rich countries. Almost twenty years ago the United Nations introduced its Human Development Index and scored each country according to a combined measure of Gross Domestic Product per head, education and life expectancy. Since then, economists have developed many other measures of wellbeing, the ‘Genuine Progress Indicator’, the Happy Planet Index and the like. Most recently, Nobel laureates Joseph Stiglitz and Amartya Sen produced their report on measures of economic performance and “social progress” for France’s President Sarkozy.

But if you thought the Stiglitz-Sen report would tell us how to increase human wellbeing, you’d be disappointed. Rather than showing us how to improve wellbeing, they focus only on how to measure it. Even within this limited scope, the suggested improvements are remarkably pedestrian. Despite the sharp contrast between the material success and social failings of modern societies, they keep Gross National Income per head at center stage. The changes they propose are limited to various subtractions from GNI per head to take account of costs which boost economic growth such as longer commuting times, pollution and loss of leisure, while making additional adjustments, such as for the fact that we do not share the proceeds of growth equally. But this report is nevertheless important because it confirms the growing awareness that we have got to the end of the real benefits of growth.

So if the priority really has shifted from our material to social needs, what can be done in affluent societies to raise the real quality of life? Rather to our surprise, we believe we have found a crucially important part of the answer to this question.

Like others, we had been working for some years trying to understand the tendency for health to be better in countries with smaller income differences between rich and poor. There are now around 200 studies of income inequality and health. Other researchers working on violent crime had shown that homicide rates were lower in more equal countries. We started to wonder whether this pattern applied to other health or social problems. To find out, we collected internationally comparable figures on levels of trust, mental illness, life expectancy, infant mortality, prevalence of drug use and levels of obesity, homicide rates and rates of imprisonment, teenage birth rates, children’s educational achievement, and measures of child wellbeing – for each of 21 rich developed market democracies.

To measure inequality we used the ratio of the incomes of the top 20 percent in each country compared to the incomes of the bottom 20 percent. In the more equal countries (Japan, Finland, Norway, Sweden) the top 20 percent have 3.4 to 4.0 times as much. In the more unequal societies (USA, Portugal, UK) they have between 7 and 8.5 times as much. By this measure they are twice as unequal as the more equal countries.

Although people have often regarded inequality as divisive and socially corrosive, that did not prepare us for what we found. The frequency of all these problems was systematically related to income inequality. The bigger the income differences between rich and poor in each society, the worse these health and social problems became. And rather than things being just a bit worse in more unequal countries, they were very much worse. More unequal countries tended to have three times the level of violence, of infant mortality and mental illness; teenage birth rates were six times as high, and rates of imprisonment increased eight-fold.

The sense that inequality is divisive was shown by the fact that in more unequal countries, only about 15 percent of the population feel they can trust others, compared to around two-thirds in the more equal ones. That evidence was supported by relationships with social capital and levels of violence – all showing that inequality damages the social fabric of society.

Although the statistics told us that these relationships could not be dismissed as chance, we thought we should check in a second, independent, test bed to see if the same relationships held true. We looked at data for the 50 states of the USA, asking exactly the same question: did the more equal states, like the more equal countries, also do better on all these health and social problems than the less equal ones?

The pattern was extraordinarily similar. What the evidence shows is a tendency for more unequal societies to be socially dysfunctional right across the board. It is not that one country or state has good health but high levels of violence, or high teenage birth rates but low levels of drug abuse. Instead, the pattern is for most problems to become better or worse together.

Our interpretation of these findings is that bigger income differences lead to bigger social distances up and down the status hierarchy, increasing feelings of superiority and inferiority and adding to status competition and insecurity. Some of the causal links are known: the effects of chronic stress on the immune and cardiovascular system are increasingly well understood and must underpin the relationship of income inequality to health. Similarly, the reason why violence increases in more unequal societies is because inequality makes status even more important and the most common triggers to violence are loss of face, disrespect, and humiliation.

What the evidence shows is that problems that everyone knows are related to social status within our societies become much more common when the social status differences are increased. But, surprisingly, the benefits of greater equality are not confined to the poor. While the benefits are much bigger lower down the social ladder, even well paid middle class people live longer and do better in more equal societies. Their children too are less likely to become victims of violence, to drop out of high school or become involved in drugs. The reasons why the benefits of greater equality extend to a large majority of society is, of course, that we are all caught up in status differentiation and we all worry about what others think of us and how we are judged.

How can income differences be reduced? There seem to be two quite different routes. While countries like Sweden start off with large differences in earnings and then redistribute, countries like Japan have much smaller earnings differences to start with – before taxes and benefits. Within the US, Vermont and New Hampshire provide a similar contrast. It doesn’t seem to matter how you get greater equality so long as you get there somehow.

Politics in the future are likely to be dominated by the need to reduce carbon emissions. But there too greater equality has a role to play. Consumerism is probably the greatest obstacle to achieving sustainability. Because the pressure to consume is intensified by status competition, greater equality will be necessary to reduce it. Reigning in carbon emissions depends, more than any other problem, on concern for the greater good. But as inequality weakens trust and community life, it also weakens public spiritedness and concern for the greater good. An international survey of business leaders found that those in more equal countries regard environmental issues as more important. It is also the more equal societies that do best on recycling and foreign aid.

Both our social and environmental wellbeing require that developed societies turn their attention from material accumulation to the quality of the social environment. What is exciting is that greater equality may be the key which brings solutions to the most important problems of our day within our reach.

Richard Wilkinson, Emeritus Professor of Social Epidemiology, University of Nottingham and Kate Pickett, Professor of Epidemiology, University of York. Adapted from The Spirit Level: Why Greater Equality Makes Societies Stronger. Bloomsbury Press, NYC, December 2009.

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