How economic inequality harms societies Richard Wilkinson

you all know the truth of what I’m gonna

say

I think the intuition that inequality is

divisive and socially corrosive has been

around since before the French

Revolution what’s changed is we now can

look at the evidence we can compare

societies more and less equal societies

and see what inequality does I’m going

to take you through that data and then

explain why the links that I think I’m

going to be showing you exist but first

see what a miserable lot we are I want

to start though with a paradox this

shows you life expectancy against gross

national income how rich countries are

on average and you see the countries on

the right like Norway in the USA a twice

as rich as Israel Greece Portugal on the

left and it makes no difference to their

life expectancy at all there’s no

suggestion of a relationship there but

if we look within our societies there

are extraordinary social gradients in

health running right across society is

again is life expectancy these are small

areas of England and Wales the poorest

on the right the richest on the left not

a difference between the poor and the

rest of us even the people just below

the top have less good health than the

people at the top so income means

something very important within our

societies and nothing between them the

explanation of that paradox is that

within our societies were looking at

relative income or social position

social status where we are in relation

to each other and the size of the gaps

between us and as soon as you’ve got

that idea you should immediately wonder

what happens if we widen the differences

or compress them make the income

differences bigger or smaller and that’s

what I’m going to show you I’m not using

any hypothetical data I’m taking data

from the UN it’s the same as the world

has on the scale of income differences

in these rich developed market

democracies the measure we’ve used sis

because it’s easy to understand and you

can download it is how much richer the

top 20% than the bottom 20% in each

country and you see in the moral

countries on the Left Japan Finland

Norway Sweden the top 20% about three

and a half four times as rich as the

bottom 20% but at the more unequal end

UK Portugal USA Singapore the

differences are twice as big on that

measure we are twice as unequal as some

of the other successful market

democracies now I’m going to show you

what that does to our societies we

collected data on problems with social

gradients the kind of problems are more

common at the bottom of the social

ladder internationally comparable data

on life expectancy on kids maths and

literacy scores on infant mortality

rates homicide rates proportion of the

population in prison teenage birth rates

levels of trust obesity mental illness

rich in the standard diagnostic

classification includes drug and alcohol

addiction and social mobility we put

them the year all in one index are all

weighted equally where country is is

sort of average score on these things

and there you see it in relation to the

measure of inequality I just shown you

which I shall use over and over again in

data the more unequal countries doing

worse on all these kinds of social

problems

it’s an extraordinary close correlation

but if you look at that same index of

health and social problems in relation

to GNP per capita gross national income

there’s nothing there no correlation

anymore we were a little bit worried

that people might think we’d been

choosing problems to suit our argument

and just manufactured this this evidence

so we also looked in we did a paper in

the British Medical Journal on the

UNICEF index of child well-being it has

40 different components put together by

other people

it contains weather

can talk to their parents whether they

have books at home what immunization

rates are like weathers bullying at

school everything goes into it here it

is in relation to that same measure of

inequality kids doing worse in the

morning society’s highly significant

relationship but once again if you look

at that measure of child well-being in

relation to national income per person

there’s no relationship no suggestion of

relationship what all the data I’ve

shown you so far says is the same thing

the average well-being of our societies

is not dependent any longer on national

income and economic growth that’s very

important in poorer countries but not in

the rich developed world but the

difference is between us and where we

are in relation to each other now matter

very much I’m going to show you some of

the separate bits of our index here for

instance is trust it’s simply the

proportion of the population who agree

most people can be trusted comes from

the World Values Survey you see it the

more unequal end it’s about 15% of the

population who feel they can trust

others but in the more equal societies

it rises to 60 or 65% and if you look at

measures of involvement in community

life or social capital very similar

relationships closely related to

inequality I may say we did all this

work twice we did it first on these rich

developed countries and then as a

separate testbed we repeated it all on

the 50 American states asking just the

same question to the more unequal States

to worse on all these kinds of measures

so here is trust from the General Social

Survey of the federal government related

to inequality very similar scatter of a

similar range of levels of trust same

thing is going on basically we found

that almost anything that’s related to

trust internationally is related to

trust amongst the 50 states in that

separate test bed we’re not just talking

about a fluke this is mental illness

w-h-o put together figures using this

same diagnostic interviews on random

samples of the population to allow us to

compare rates of mental illness in each

Society this is the percent of the

population with any mental illness in

the preceding year and it does from

about 8 percent up to 3 times that whole

societies with three times the level of

mental illness of others and again

closely related to inequality this is

violence these red dots are American

states and the blue triangles of

Canadian provinces but look at the scale

of the differences it goes from 15

homicides per million up to 150 this is

the proportion of the population in

prison there’s about a tenfold

difference their log scale up the side

but it goes from about 40 to 400 people

in prison that relationship is not

mainly driven by more crime in some

places that’s part of it but most of it

is about more punitive sentencing

harsher sentencing and the more unequal

societies are more likely also to retain

the death penalty here we have children

dropping out of high school again quite

big differences extraordinarily damaging

if you’re talking about using the

talents of the population this is social

mobility it’s actually a measure of

mobility based on income basically it’s

asking do rich fathers have rich sons

and poor fathers have poor sons or is

there no relationship between the two

and at the more unequal end fathers

income is much more important in the UK

USA and in countries the Scandinavian

countries fathers income is much less

important there’s more social mobility

and as we like to say and I know a lot

of Americans in the audience here if

Americans want to live the American

Dream they should go to Denmark

I’ve shown you just a few things in

italics here I could have shown you a

number of other problems that all

problems that tend to be more common at

the bottom of the social gradient but

there are endless problems with social

gradients that are worse in more unequal

countries not just a little bit worse

but anything from twice as common to ten

times as common think of the expense the

human cost of that I want to go back

there to this graph that I showed you

earlier where we put it all together to

make two points one is that in graph

after graph we find the countries that

do worse whatever the outcome seemed to

be the more unequal ones and the ones

that do well seem to be the Nordic

countries in Japan so what we’re looking

at is general social dysfunction related

to inequality it’s not just one or two

things that go wrong it’s most things

the other really important point I I

want to make on this graph is that if

you look at the bottom Sweden and Japan

there are very different countries in

all sorts of ways the position of women

how closely they keep - no clear family

the opposite ends of the poles in terms

of the rich developed world but another

really important difference is how they

get their great a equality Sweden has

huge differences in earnings and it

narrows the gap through taxation general

welfare states generous benefits and so

on

Japan is rather different though it

starts off with much smaller differences

in earnings before tax it has lower

taxes it has a smaller welfare state and

in our analysis of American States

recite find rather the same contrast the

some states that do well through

redistribution some states that do well

because they have smaller income

differences before tax so we conclude

that it doesn’t much matter how you get

your greater equality as long as you get

there somehow I’m not talking about

perfect equality I am talking about what

exists in rich developed market

democracies

another really surprising part of this

picture is that it’s not just the poor

who affected by inequality there seems

to be some truth in John Dunn’s no man

is an island in the number of studies

it’s possible to compare how people do

in more and less equal countries at each

level in the social hierarchy this is

just one example its infant mortality

some Swedes very kindly classified a lot

of their infant deaths according to the

British Registrar General socio-economic

classification and so it’s

anachronistically a classification by

father’s occupation so single parents go

on their own but then the low wet says

low social class that’s unskilled manual

occupations it goes through towards the

skilled manual occupations and a little

gentler than the junior non manual going

up the high to the professional

occupations doctors lawyers directors of

larger companies you see there that

Sweden does better than Britain all the

way across the social hierarchy the

biggest difference is at the bottom of

society but even at the top there seems

to be a small benefit to being in a more

equal society we show that on about five

different sets of data covering

educational outcomes and health in the

United States and internationally and

that seems to be the general picture

that greater equality makes most

difference at the bottom but has some

benefit even at the top but I should say

a few words about what’s going on I

think I’m looking and talking about the

psychosocial effects of inequality more

to do with feelings of superiority and

inferiority of being valued and devalued

respected and disrespected and of course

those feelings of the status competition

that comes out of that drives the

consumerism in our society it also leads

to status insecurity we worry more about

how we’re judged and seen by others

whether we’re regarded as attractive

clever

all that kind of thing the social

evaluative judgments increase the fear

of there’s social evaluative judgments

interestingly some work parallel work

going on in social psychology some

people reviewed 208 different studies in

which volunteers had been invited into

psychological laboratory and had their

stress hormones their responses to doing

stressful tasks measured and in the

review what they were interested in

seeing is what kind of stresses most

reliably raise levels of cortisol the

central stress hormone and the

conclusion was it was tasks that

included social evaluative threat

threats to self esteem or social status

in which others can negatively judge

your performance those kind of stresses

have a very particular effect on the

physiology of stress now we have been

criticized of course there are people

who dislike this stuff and people who

find it very surprising I should tell

you though that when people criticize us

for picking and choosing data we never

pick and choose data we have an absolute

rule that if our data source has data

for one of the countries we’re looking

at it goes into the analysis our data

source decides whether it’s a reliable

data we don’t otherwise that would

introduce bias what about other

countries there are 200 studies of

health in relation to income inequality

in the academic peer-reviewed journals

this isn’t confined to these countries

here hiding a very simple demonstration

that the same countries the same measure

of inequality one problem after another

why don’t we control for other factors

well we’ve shown you that GNP per capita

doesn’t make any difference

and of course others using more

sophisticated methods in the literature

have controlled for poverty and

education and so on

what about causality correlation in

itself doesn’t prove prove causality we

spend a good bit of time and indeed

people know the causal links quite well

in some of these outcomes a big change

in our understanding of drivers of

chronic of of health in the rich

developed world is how important chronic

stress from social sources is affecting

the immune system the cardiovascular

system or for instance the reason why

violence becomes more common in more

unequal societies is because people are

sensitive to being looked down on I

should say to deal with this we’ve got

to deal with the post-tax things and the

pretax things we’ve got to constrain

income the bonus culture in comes at the

top I think we must make bosses

accountable to their employees in any

way we can I think the take-home message

though is that we can improve the real

quality of human life by reducing the

differences in incomes between us

suddenly we have a handle on the

psychosocial well-being of whole

societies and that’s exciting thank you

you