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

The True – and False – Costs Of Inequality

Kate Pickett and Richard Wilkinson 18th October 2017

Kate Pickett

Kate Pickett

The first research papers showing that health was worse and violence more common in societies with large income differences were published in the 1970s.  Since then a large body of evidence has accumulated on the damaging effects of inequality.  

Countries with bigger income differences between rich and poor tend to suffer from a heavier burden of a wide range of health and social problems.  Physical and mental health are worse, life expectancy is lower, homicide rates are higher, children’s maths and literacy scores tend to be lower, drug abuse is more common and more people are imprisoned.  All these are closely correlated with levels of inequality both internationally and among the 50 states of the USA. 

wilkinson bio

Richard Wilkinson

People are often surprised at the length of the list of problems which are worse in more unequal counties.  The key is that all these outcomes have social gradients making them more common at each step down the social ladder.  That makes the basic pattern easy to understand: problems which we know are related to social status within societies get worse when the status differences are increased.  Bigger material differences make the social distances between us greater.  The vertical dimension of society – the social pyramid of class and status differences – becomes more important.  The material differences between us provide the framework or scaffolding to which all the cultural markers of status and class – from where we live to aesthetic taste and children’s education – attach themselves.  

Unequal across the board 

We should not regard the scale of income inequality as a new determinant of health and social problems; rather, it tells us more about the familiar class gradient in outcomes that we have always recognised.  Few people can be unaware that the poorest areas of our societies tend to suffer the worst health as well as having the lowest educational performance of school children and usually the highest levels of violence.  The additional insight is merely that all these problems get worse when income differences are increased.  However, they don’t just get a little worse.  In our analyses of rich developed countries, we found that mental illness and infant mortality were at least twice as common in more unequal countries, and in some analyses, homicide rates, imprisonment and teenage birth rates have been found to be as much as ten times as common in more unequal societies – for example in the USA, the UK and Portugal compared to the more equal Scandinavian countries or Japan.   

The explanation of these large differences is that inequality does not confine its effects to the poor.  Outcomes are less good among the vast majority of the population.  Although the poor suffer the biggest effects of inequality, the advantages of living in a more equal society extend even to the very comfortably off.  The data are not available to tell us whether or not the super-rich also suffer disadvantages of inequality, but it seems implausible to think that they are immune to the increased rates of violence or drug and alcohol addiction in more unequal societies.  


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

Rich but unequal 

That the effects of inequality go so far up the income scale fits the pattern of social gradients.  Problems with social gradients are rarely confined to the poor.  Like the effects of inequality, they go right across the whole society: even people just below the richest have health which is slightly less good than those even better off than them.  Indeed, if you take away the contribution which poverty makes to poor health, most of the pattern of health inequalities would remain.   

Politicians, even some conservative politicians, have proclaimed their desire to create a classless society, but evidence of many different kinds shows that this cannot be done without decreasing the differences in income and wealth that divide us.  There are numerous indications that bigger income differences ossify the social structure: social mobility is slower in more unequal societies; there is less interclass marriage; residential segregation of rich and poor increases and social cohesion decreases.  Bigger material differences make the vertical dimension of society an ever more effective social divider.  

Fear of the Other 

The toll which inequality exacts from the vast majority of society is one of the most important limitations on the quality of life – particularly in developed countries.  It damages the quality of social relations essential to life satisfaction and happiness. Numerous studies have shown that community life is stronger in more equal societies.  People are more likely to be involved in local groups and voluntary organisations.  They are more likely to feel they can trust each other, and a recent study has shown that they are also more willing to help each other – to help the elderly or disabled.  But as inequality increases, trust, reciprocity and involvement in community life all atrophy.  In their place – as numerous studies have shown – comes a rise in violence, usually measured by homicide rates.  In short, inequality makes societies less affiliative and more antisocial. 

If you look at some of the most unequal societies such as South Africa or Mexico, it is clear from the way that houses are barricaded, with bars on windows and doors and fences and razor wire round gardens, that people are frightened of each other.  That is dramatically confirmed by a quite different indication of exactly the same process: studies have shown that in more unequal societies a higher proportion of a society’s labour force is employed in what is classified as ‘guard labour’ – that is security staff, police, prisons officers etc.. Essentially, these are the occupations people use to protect themselves from each other.  

The self and others 

As the vertical dimension of society becomes more prominent, it looks as if we judge each other more by status, money and social position.  The tendency to judge a person’s internal worth from their external wealth becomes stronger and, with that, we all become more worried about how we are seen and judged.  A series of psychological studies shows that we are particularly sensitive to worries of this kind.  An analysis of results from over 200 studies shows that the stressors which most reliably push up levels of stress hormones – such as cortisol – include ‘threats to self-esteem or social status in which others can negatively judge performance’.  These kinds of stressors are central to the causal mechanisms which make outcomes worse in more unequal societies.  For example, acts of violence are very often triggered by loss of face, people feeling disrespected and looked down on.  Similarly, long-term stress compromises many physiological systems and its health effects have been likened to more rapid ageing. 

Important to understanding the effects of inequality is the way it affects mental health.  An international study has shown that more unequal societies have higher levels of status anxiety – not just among the poor, but at all income levels, including the richest decile.  Living in societies where some people seem extremely important and others are regarded as almost worthless does indeed make us all more worried about how we are seen and judged.  There are two very different ways people can respond to these worries.  They may respond by feeling overcome by a lack of confidence, self-doubt and low self-esteem, so that social gatherings feel too stressful and are seen as ordeals to be avoided and people retreat into depression.  Alternatively, and yet usually still a response to the same insecurities, people may go in for a process of self-enhancement or self-advertisement, trying to big themselves up in other’s eyes.  Instead of being modest about their achievements and abilities, they flaunt them, finding ways of bringing references into conversation of almost anything which helps them present themselves as capable and successful.   

As consumerism is partly about self-presentation and status competition, it too is intensified by inequality.  Studies show that if you live in a more unequal area, you are more likely to spend money on status goods and a flashy car.   

But the real tragedy of this is not simply the costs of so much additional security or the human costs in terms of increasing violence.  It is, as research makes very clear, that social involvement and the quality of social relations, friendship and involvement in community life, are powerful determinants of both health and happiness.  Inequality strikes at the foundations of the quality of life.  Status insecurity and competition makes social life more stressful: we worry increasingly about self-presentation and how we are judged. Instead of the relationships of friendship and reciprocity which add so much to health and happiness, inequality means we prop ourselves up with narcissistic purchases or withdraw from social life.  Though this suits business and sales, it is not a sound basis for learning to live within the planetary boundaries.   


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

This is the latest in a series on inequality in Europe sponsored by SE, the Hans-Böckler-Stiftung and the Friedrich-Ebert-Stiftung. Also have a look at our focus page “What is inequality?”

 

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 / Economy / The True – and False – Costs Of Inequality

Most Popular Posts

Visentini,ITUC,Qatar,Fight Impunity,50,000 Visentini, ‘Fight Impunity’, the ITUC and QatarFrank Hoffer
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

Most Recent Posts

transition,deindustrialisation,degradation,environment Europe’s industry and the ecological transitionCharlotte Bez and Lorenzo Feltrin
central and eastern Europe,unions,recognition Social dialogue in central and eastern EuropeMartin Myant
women soldiers,Ukraine Ukraine war: attitudes changing to women soldiersJennifer Mathers and Anna Kvit
military secrets,World Trade Organization,WTO,NATO,intellectual-property rights Military secrets and the World Trade OrganizationUgo Pagano
energy transition,Europe,wind and solar Europe’s energy transition starts to speed upDave Jones

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?

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

Discover the new FEPS Progressive Yearbook and what 2023 has in store for us!

The Progressive Yearbook focuses on transversal European issues that have left a mark on 2022, delivering insightful future-oriented analysis for the new year. It counts on renowned authors' contributions, including academics, politicians and analysts. This fourth edition is published in a time of war and, therefore, it mostly looks at the conflict itself, the actors involved and the implications for Europe.


DOWNLOAD HERE

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

Social policy in the European Union: state of play 2022

Since 2000, the annual Bilan social volume has been analysing the state of play of social policy in the European Union during the preceding year, the better to forecast developments in the new one. Co-produced by the European Social Observatory (OSE) and the European Trade Union Institute (ETUI), the new edition is no exception. In the context of multiple crises, the authors find that social policies gained in ambition in 2022. At the same time, the new EU economic framework, expected for 2023, should be made compatible with achieving the EU’s social and ‘green’ objectives. Finally, they raise the question whether the EU Social Imbalances Procedure and Open Strategic Autonomy paradigm could provide windows of opportunity to sustain the EU’s social ambition in the long run.


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