Social Europe

politics, economy and employment & labour

  • Themes
    • Strategic autonomy
    • War in Ukraine
    • European digital sphere
    • Recovery and resilience
  • Publications
    • Books
    • Dossiers
    • Occasional Papers
    • Research Essays
    • Brexit Paper Series
  • Podcast
  • Videos
  • Newsletter

Greater equality: our guide through Covid-19 to sustainable wellbeing

Kate Pickett and Richard Wilkinson 25th November 2020

The pandemic has reinforced the case for egalitarianism to define the ethos of the welfare state.

economic democracy, employee ownership
Kate Pickett

The living standards of the poor differ dramatically between low- and high-income countries. In India, living in poverty may mean living in a one-roomed shack with no sewerage, whereas in Norway it may mean living in a three-bedroom, centrally-heated flat with many modern appliances.

But the overriding subjective experience of poverty is substantially the same, regardless of those differences. Interviews with those regarded as poor in richer and poorer countries found: ‘Respondents universally despised poverty and frequently despised themselves for being poor.’ By being poor, they felt that they ‘had both failed themselves and that others saw them as failures’ and their sense of shame ‘was reinforced in the family, the workplace and in their dealings with officialdom’.

economic democracy, employee ownership
Richard Wilkinson

Inequality and hierarchy

That poverty should make people feel so shamed, devalued and humiliated, despite such different material circumstances, highlights the overriding importance of relativities and of inequality itself. Inequality brings hierarchy into social relationships.

The material differences in a society, the ‘vertical’ inequalities of income, wealth and power, are foundational. They are the inequalities through which the various ‘horizontal’ inequalities of ethnicity, gender, sexuality and disability are expressed and experienced. They create the social distances of class and status, of superiority and inferiority, exacerbating the downward prejudices and discrimination experienced by women, black, ethnic and other minorities. How large the overall ‘vertical’ inequalities are across a society—from the heights of privilege to the depths of deprivation and degradation—the scale of material inequality tells us how far societies are from treating all members as of equal human worth.


Our job is keeping you informed!


Subscribe to our free newsletter and stay up to date with the latest Social Europe content. We will never send you spam and you can unsubscribe anytime.

Sign up here

Larger material gaps in a society make class and status differences more important. They increase the prevalence of a wide range of health and social problems associated with low status. Most of the problems that we know are related to status within societies become more common when bigger income differences make the differences in social status larger. Examples include health, child wellbeing, violence, social cohesion, social mobility, imprisonment rates and the educational performance of schoolchildren.

Crucial importance

The coronavirus pandemic has focused attention—once again—on the crucial importance of the scale of income differences. In a comparison of 84 countries as well as among the 50 states of the USA, coronavirus death rates have been found to be higher where income spreads are larger (after controlling for confounding factors).

Societies with female political leaders have been more successful than others in limiting the pandemic. This appears to be because more equal societies are not only more likely to elect women to leadership positions but also, due to their greater equality, were already healthier and more cohesive before the pandemic.

Although inequality increases violence (as measured by homicide rates), there are not yet studies of whether the rise in domestic violence during the Covid-19 lockdown has been greater in more unequal societies.

Welfare system

One of the most crucial functions of welfare states should therefore be to reduce inequalities in income and wealth. But that does not tell us much about what kind of welfare system is most desirable.

As Gøsta Esping-Andersen and others have shown, bigger welfare states do not always produce greater equality. The relationship between different welfare-state systems and inequality is more complicated than might at first be imagined. The same system applied to different populations may produce different levels of inequality—depending, for instance, on the proportion of elderly or single parents in the population.

Large-scale redistribution, through progressive taxation and generous social-security systems, is however essential. That is necessary not only to support the economically inactive population but also because the inequalities of pre-tax (‘market’) incomes are intolerably large.

Over the last 40 years, inequality has increased in so many countries mainly because income differences before taxes and transfers have widened so dramatically—particularly as a result of the take-off of top incomes. It has thus also become increasingly important to reduce income differences before tax.


We need your support


Social Europe is an independent publisher and we believe in freely available content. For this model to be sustainable, however, we depend on the solidarity of our readers. Become a Social Europe member for less than 5 Euro per month and help us produce more articles, podcasts and videos. Thank you very much for your support!

Become a Social Europe Member

The picture is broadly similar in many countries: the historic strengthening of the labour movement and social-democratic parties led to a decline in inequality from sometime in the 1930s. That continued through to the late 1970s, to be followed—because of the rise of neoliberalism and the decline of the labour movement—by the modern rise in inequality from around 1980. The politics behind these changes is illustrated clearly by the way trends in inequality in different countries almost exactly mirror changes in trade union membership.

Economic democracy

We need to develop new means of bringing top incomes under democratic constraint. Perhaps the most promising are forms of economic democracy—not only substantial and increasing employee representation on the boards of larger companies but also incentives to expand the small sector of more thoroughly democratic models, such as employee co-operatives and employee-owned companies.

As well as smaller income differences, more democratic forms of management have many other advantages, including improvements in productivity. That is in stark contrast to conventional companies, in which those with the largest pay differentials perform less well than those with smaller differentials.

Extending democracy into the economic sphere may have the important additional advantage of underpinning our political democracies—which have become increasingly dysfunctional—and embedding equality fundamentally in the social structure. Because some multinational corporations not only have revenues bigger than the gross domestic product of smaller countries but also exercise high control over the lives of hundreds of thousands of employees, they inevitably raise issues of democratic accountability. The same ethical justifications used historically to replace political dictatorships with democracy are just as relevant to the demand for economic democracy today.

Reining in consumerism

Greater equality is also key if, over the next 10 or 20 years, we are to rein in consumerism and waste and achieve carbon neutrality. Research has shown that inequality intensifies the status competition that drives consumerism. Inequality makes money more important: it becomes the measure of the person—so much so, that people living in more unequal areas have been found to spend more on status goods, including ostentatious cars and clothes with designer labels. Not only that but borrowing tends to increase with inequality and bankruptcies become more common.

The pandemic has shown that our societies are more flexible, and their populations more vulnerable, than most people had previously recognised. Given the urgency of making the transition to sustainable wellbeing, these are valuable lessons. Greater equality has been shown to be a powerful asset, in increasing society’s flexibility and in reducing our vulnerability to Covid-19.

The prize of sustainable wellbeing requires that populations of high-income countries abandon the goal of economic growth, which no longer improves the health or wellbeing of their populations, and turn their attention instead to improving the quality of the social environment. We know that social relations are powerful determinants of health and wellbeing—and both can be improved by reducing inequality.

This is part of a series on the Coronavirus and the Welfare State supported by the Friedrich Ebert Stiftung

Kate Pickett and Richard Wilkinson

Kate Pickett is professor of epidemiology at the University of York. Richard Wilkinson is honorary visiting professor at the University of York.

You are here: Home / Society / Greater equality: our guide through Covid-19 to sustainable wellbeing

Most Popular Posts

Russian soldiers' mothers,war,Ukraine The Ukraine war and Russian soldiers’ mothersJennifer Mathers and Natasha Danilova
IGU,documents,International Gas Union,lobby,lobbying,sustainable finance taxonomy,green gas,EU,COP ‘Gaslighting’ Europe on fossil fuelsFaye Holder
Schengen,Fortress Europe,Romania,Bulgaria Romania and Bulgaria stuck in EU’s second tierMagdalena Ulceluse
income inequality,inequality,Gini,1 per cent,elephant chart,elephant Global income inequality: time to revise the elephantBranko Milanovic
Orbán,Hungary,Russia,Putin,sanctions,European Union,EU,European Parliament,commission,funds,funding Time to confront Europe’s rogue state—HungaryStephen Pogány

Most Recent Posts

reality check,EU foreign policy,Russia Russia’s invasion of Ukraine—a reality check for the EUHeidi Mauer, Richard Whitman and Nicholas Wright
permanent EU investment fund,Recovery and Resilience Facility,public investment,RRF Towards a permanent EU investment fundPhilipp Heimberger and Andreas Lichtenberger
sustainability,SDGs,Finland Embedding sustainability in a government programmeJohanna Juselius
social dialogue,social partners Social dialogue must be at the heart of Europe’s futureClaes-Mikael Ståhl
Jacinda Ardern,women,leadership,New Zealand What it means when Jacinda Ardern calls timePeter Davis

Other Social Europe Publications

front cover scaled Towards a social-democratic century?
Cover e1655225066994 National recovery and resilience plans
Untitled design The transatlantic relationship
Women Corona e1631700896969 500 Women and the coronavirus crisis
sere12 1 RE No. 12: Why No Economic Democracy in Sweden?

Hans Böckler Stiftung Advertisement

The macroeconomic effects of re-applying the EU fiscal rules

Against the background of the European Commission's reform plans for the Stability and Growth Pact (SGP), this policy brief uses the macroeconometric multi-country model NiGEM to simulate the macroeconomic implications of the most relevant reform options from 2024 onwards. Next to a return to the existing and unreformed rules, the most prominent options include an expenditure rule linked to a debt anchor.

Our results for the euro area and its four biggest economies—France, Italy, Germany and Spain—indicate that returning to the rules of the SGP would lead to severe cuts in public spending, particularly if the SGP rules were interpreted as in the past. A more flexible interpretation would only somewhat ease the fiscal-adjustment burden. An expenditure rule along the lines of the European Fiscal Board would, however, not necessarily alleviate that burden in and of itself.

Our simulations show great care must be taken to specify the expenditure rule, such that fiscal consolidation is achieved in a growth-friendly way. Raising the debt ceiling to 90 per cent of gross domestic product and applying less demanding fiscal adjustments, as proposed by the IMK, would go a long way.


DOWNLOAD HERE

ILO advertisement

Global Wage Report 2022-23: The impact of inflation and COVID-19 on wages and purchasing power

The International Labour Organization's Global Wage Report is a key reference on wages and wage inequality for the academic community and policy-makers around the world.

This eighth edition of the report, The Impact of inflation and COVID-19 on wages and purchasing power, examines the evolution of real wages, giving a unique picture of wage trends globally and by region. The report includes evidence on how wages have evolved through the COVID-19 crisis as well as how the current inflationary context is biting into real wage growth in most regions of the world. The report shows that for the first time in the 21st century real wage growth has fallen to negative values while, at the same time, the gap between real productivity growth and real wage growth continues to widen.

The report analysis the evolution of the real total wage bill from 2019 to 2022 to show how its different components—employment, nominal wages and inflation—have changed during the COVID-19 crisis and, more recently, during the cost-of-living crisis. The decomposition of the total wage bill, and its evolution, is shown for all wage employees and distinguishes between women and men. The report also looks at changes in wage inequality and the gender pay gap to reveal how COVID-19 may have contributed to increasing income inequality in different regions of the world. Together, the empirical evidence in the report becomes the backbone of a policy discussion that could play a key role in a human-centred recovery from the different ongoing crises.


DOWNLOAD HERE

ETUI advertisement

The EU recovery strategy: a blueprint for a more Social Europe or a house of cards?

This new ETUI paper explores the European Union recovery strategy, with a focus on its potentially transformative aspects vis-à-vis European integration and its implications for the social dimension of the EU’s socio-economic governance. In particular, it reflects on whether the agreed measures provide sufficient safeguards against the spectre of austerity and whether these constitute steps away from treating social and labour policies as mere ‘variables’ of economic growth.


DOWNLOAD HERE

Eurofound advertisement

Eurofound webinar: Making telework work for everyone

Since 2020 more European workers and managers have enjoyed greater flexibility and autonomy in work and are reporting their preference for hybrid working. Also driven by technological developments and structural changes in employment, organisations are now integrating telework more permanently into their workplace.

To reflect on these shifts, on 6 December Eurofound researchers Oscar Vargas and John Hurley explored the challenges and opportunities of the surge in telework, as well as the overall growth of telework and teleworkable jobs in the EU and what this means for workers, managers, companies and policymakers.


WATCH THE WEBINAR HERE

Foundation for European Progressive Studies Advertisement

The winter issue of the Progressive Post magazine from FEPS is out!

The sequence of recent catastrophes has thrust new words into our vocabulary—'polycrisis', for example, even 'permacrisis'. These challenges have multiple origins, reinforce each other and cannot be tackled individually. But could they also be opportunities for the EU?

This issue offers compelling analyses on the European health union, multilateralism and international co-operation, the state of the union, political alternatives to the narrative imposed by the right and much more!


DOWNLOAD HERE

About Social Europe

Our Mission

Article Submission

Membership

Advertisements

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641

Social Europe Archives

Search Social Europe

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Follow us

RSS Feed

Follow us on Facebook

Follow us on Twitter

Follow us on LinkedIn

Follow us on YouTube