Towards A More Equal Europe Richard Wilkinson Emeritus

Towards A More Equal Europe Richard Wilkinson Emeritus Professor of Social Epidemiology Photo by kind permission of Matt Stuart

Income share of richest 1% in Anglo-Saxon countries 1921 -2002 Source: Atkinson AB, Leigh A. (2004) Understanding the Distribution of Top Incomes in Anglo-Saxon Countries over the Twentieth Century

Trade Unions membership (% workforce) and Share of Income going to top 10% (USA, 19182008) Colin Gordon’s analysis of Historical Statistics for the US, unionstats. com, Piketty and Saez 2003, and World Top Incomes Database. Economic Policy Institute, Washington DC.

Inequality (Gini ) Countries with stronger Trade Unions are less unequal (data for 16 OECD countries 1966 -1994) % of labour force in trade unions Gustafsson B, Johansson M. In search for a smoking gun: what makes income inequality vary over time in different countries? LIS Working Paper 172; 1997.

Income per head and life-expectancy: rich & poor countries 5 Source: Wilkinson & Pickett, The Spirit Level (2009) www. equalitytrust. org. uk

Life expectancy in rich countries is no longer related to National Income per head Wilkinson & Pickett, The Spirit Level www. equalitytrust. org. uk

Life expectancy is strongly related to income within rich countries Richest Wilkinson & Pickett, The Spirit Level Poorest www. equalitytrust. org. uk

Health and social problems are worse in more unequal countries Index of health and social problems Index of: • Life expectancy • Math & Literacy • Infant mortality • Homicides • Imprisonment • Teenage births • Trust • Obesity • Mental illness – incl. drug & alcohol addiction • Social mobility Wilkinson & Pickett, The Spirit Level www. equalitytrust. org. uk

Index of: • Life expectancy • Math & Literacy • Infant mortality • Homicides • Imprisonment • Teenage births • Trust • Obesity • Mental illness – incl. drug & alcohol addiction • Social mobility Index of health and social problems Neither health nor social problems are related to national income per head Wilkinson & Pickett, The Spirit Level www. equalitytrust. org. uk

Child well-being is better in more equal countries Wilkinson & Pickett, The Spirit Level www. equalitytrust. org. uk

The UNICEF Index of Child Wellbeing is not related to National Income per head Wilkinson & Pickett, The Spirit Level www. equalitytrust. org. uk

“Poverty is not a certain small amount of goods, nor is it just a relation between means and ends; above all it is a relation between people. Poverty is a social status. As such it is an invention of civilization. It has grown with civilization. . . as an invidious distinction between classes…. ” Sahlins M. . 1974

Absolute and relative poverty

Income inequality & bullying in 37 countries Elgar FJ, Craig W, Boyce W, Morgan A, Vella-Zarb R. Income Inequality and School Bullying: Multilevel Study of Adolescents in 37 Countries. J. Adolescent Health 2009; 45(4): 351 -359.

Social fabric and inequality • • Less trust Weaker community life More violence More status anxiety Stronger class identification Less willing to help others – incl elderly & disabled More ‘self-enhancment’

Johnson SL, Leedom LJ, Muhtadie L. The Dominance Behavioral System and Psychopathology: evidence from self-report, observational, and biological studies. Psychological Bulletin. 2012; 138(4): 692 -743. ABSTRACT: “We begin by describing psychological, social, and biological correlates of the Dominance Behavioral System. Extensive research suggests that externalizing disorders, mania proneness, and narcissistic traits are related to heightened dominance motivation and behaviors. Mania and narcissistic traits also appear related to inflated selfperceptions of power. Anxiety and depression are related to subordination and submissiveness, as well as a desire to avoid subordination. Models of the DBS have received support from research with humans and animals; from self-report, observational, and biological methods; and use of naturalistic and experimental paradigms. ”

Mental illness is more common in more unequal societies Wilkinson & Pickett, The Spirit Level www. equalitytrust. org. uk

Percent of population depressed in past 2 weeks Depression is more common in more unequal states Income Inequality (Gini) Messias E, Eaton WW, et al. . Economic grand rounds: Income inequality and depression across the United States: an ecological study. " Psychiatric Services, 2011; 62(7): 710 -2.

Schizophrenia is more common in more unequal countries Burns JK, Tomita A, Kapadia AS. Income inequality and schizophrenia. International Journal of Social Psychiatry 2013

Cortisol response (effect size) What kind of stressful tasks raise stress hormones most? Tasks with ‘social evaluative threat’ (uncontrollable) Other tasks Dickerson SS, Kemeny ME. Acute stressors and cortisol responses. Psychological Bulletin 2004; 130(3): 355 -91.

In more unequal countries people abandon modesty and emphasise their achievments Loughnan S, et al. Economic Inequality is linked to biased self-perception. Psychological Science, 2011; 22: 1254

Consumerism • Social and environmental costs • The social deficit

Changing ratio of CEO pay to average pay of production & non-supervisory workers in top 350 US companies Between 1979 -2007 the income of the: Top 0. 1% increased by 362% Top 1% increased by 156% Bottom 90% increased by 17% Mishel L, Sabadish N. Economic Policy Institute Brief #331. Washington, May 2012

The bonus culture • Replaces intrinsic motivation with extrinsic motivation • It increases sense of superiority, narcissism, hubris and antisocial tendencies. (300: 1 pay ratios) • The interests of the rich are an obstacle to economic and social progress

Extending democracy into economic life has to be our central objective. Companies have two functions: to make the goods and services we all use, and to concentrate power and wealth. We need the first but not the second! • Economic democracy turns companies from being pieces of property into communities • More democratic companies have much smaller pay differences • They transform the experience of work – sense of purpose, self-worth, valued contribution • Employee buyouts redistribute wealth and reduce unearned income • Boards can include community and consumer representative as well as employees • More democratic companies have higher productivity (see Blasi, Freeman & Kruse 2013)

Life expectancy and CO 2 emissions per head (tonnes) Wilkinson, Pickett, De Vogli. BMJ 2010; 341: 1138 -1140

Source: NASA-GISS, CDIAC, NOAA ESRL

Millimetres rise per year Annual rise in mean sea levels Merrifield MA, Merrifield ST, Mitchum GT. An anomalous recent acceleration of global sea level rise. J. Climate, 2009, 22, 5772– 81.

Working hours are longer in more unequal countries Source: Bowles S, Park Y. Economic Journal 2005; 115 (507): F 397–F 412. 2005.

Business leaders in more equal countries give a higher priority to complying with international environmental agreements With permission from R De Vogli & D Gimeno

More equal countries recycle more waste Source: Wilkinson & Pickett, The Spirit Level (2009)

…Progress… • The rich world has reached the end of the real benefits of economic growth • But sustainability is not a belt-tightening sacrifice; instead it involves raising the real Quality of Life • We can tackle the social deficit and improve the real Qo. L by increasing equality. • We should Increase equality by extending democracy into economic sphere. By taking this path we will: • Transform social relations • Transform experience of work • Raise the real Qo. L by meeting social needs • Achieve Sustainability

Photo by kind permission of Paula Geraghty

37

Inequality. . . How much richer are the richest 20% in each country than the poorest 20%? Income gaps How many times richer are the richest fifth than the poorest fifth? Wilkinson & Pickett, The Spirit Level www. equalitytrust. org. uk

Outcomes with social gradients • Life expectancy • Math & Literacy • Infant mortality • Homicides • Imprisonment • Teenage births • Trust • Obesity • Mental illness – incl. drug & alcohol addiction • Social mobility

People in more unequal countries trust each other less Wilkinson & Pickett, The Spirit Level www. equalitytrust. org. uk

People in more unequal states of the USA trust each other less Wilkinson & Pickett, The Spirit Level www. equalitytrust. org. uk

Infant Mortality Rates are Higher in More Unequal Countries 42 Source: Wilkinson & Pickett, The Spirit Level (2009) www. equalitytrust. org. uk

Homicide rates are higher in more unequal US states and Canadian provinces USA states Canadian provinces Daly M, Wilson M, Vasdev S. Income inequality and homicide rates in Canada and the United States. Can J Crim 2001; 43: 219 -36.

Imprisonment rates are higher in more unequal countries Wilkinson & Pickett, The Spirit Level www. equalitytrust. org. uk

Teenage Birth Rates are Higher in More Unequal Rich Countries 45 Source: Wilkinson & Pickett, The Spirit Level (2009) www. equalitytrust. org. uk

Social mobility is lower in more unequal countries Wilkinson & Pickett, The Spirit Level www. equalitytrust. org. uk

Bigger income gaps lead to deteriorations in: - Health Social Relations • Child conflict • Homicide • Imprisonment • Social capital • Trust …but not suicide • Drug abuse • Infant mortality • Life expectancy • Mental illness • Obesity Human Capital • Child wellbeing • High school drop outs • Math & literacy scores • Social mobility • Teenage births

Changes in income inequality affect mortality 3 -12 years later Effect of a 0. 01 unit increase in Gini coefficient on deaths 1986 -2006 among 701, 179 respondents. (125, 391 deaths) Data from U. S. National Health Interview Survey (NHIS) 1986 -2004 with mortality follow-up data 1986 -2006. Zheng H. Do people die from income inequality of a decade ago? Social Science & Medicine 2012; 75: 36 -45.

The benefits of greater equality are not confined to the poor but extend to all social classes Infant mortality by class: Sweden compared with England & Wales Leon, D. A. , D. Vagero, et al. (1992). "Social class differences in infant mortality in Sweden: comparison with England Wales. " Brit Med J 305(6855): 687 -91.

Literacy Scores of 16 -25 year olds by Parents' Education 1 Literacy score 0. 5 Sweden 0 Canada -0. 5 -1 United States -1. 5 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Parents' Education (years) 50 Source: Willms JD. 1997. Data from OECD Programme for International Student Assessment.

Health and social problems are worse in more unequal countries Index of health and social problems Index of: • Life expectancy • Math & Literacy • Infant mortality • Homicides • Imprisonment • Teenage births • Trust • Obesity • Mental illness – incl. drug & alcohol addiction • Social mobility Wilkinson & Pickett, The Spirit Level www. equalitytrust. org. uk

Income differences increase social class differentiation Bigger income differences make: - • • • Class more important The social pyramid higher and more hierarchical The quality of social relations deteriorates

Valued or Devalued? More inequality More superiority and inferiority • More status competition and consumerism • More status insecurity • • More worry about how we are seen and judged • More “social evaluation anxiety” (threats to self-esteem & social status, fear of negative judgements

The effects of inequality - a two stage process 1. adult experience of inequality 2. passed on to children – epigenetics? 54

Share of income going to top 0. 1% (1886 -2010) UK USA UK Japan France Japan The World Top Incomes Database Facundo Alvaredo, Tony Atkinson, Thomas Piketty, Emmanuel Saez http: //g-mond. parisschoolofeconomics. eu/topincomes

Inequality (Gini) Rising income inequality in Britain 1979 -2011 Cribb J, Joyce R, Phillips D. Living standards, poverty and inequality in the UK: 2012. Institute for Fiscal Studies, London 2012

What should they earn? British Social Attitudes Survey 2010 Chairman of large national company £ 100, 000 Cabinet Minister £ 60, 000 Unskilled Factory Worker £ 16, 000 Shop Assistant £ 16, 000 Ratio top to bottom 1 : 6. 25

What can be done? Income differences before tax • Stronger Trade Unions Taxes & benefits • Stop tax avoidance • End tax havens • Increase company democracy - employee ownership etc • Promote more directors from within companies • Make taxation progressive again Sustainability needs greater equality

Photo by kind permission of Matt Stuart

For more information: … a book and a website… http: //www. equalitytrust. org. uk 60

TUC pamphlet, Workers on Board, on employee representation. In 1960 s most shares were owned by individuals with a longer term interest in a few companies. But… Introduction from TUC Gen Sec Frances O’Grady: “UK institutional investors… spread their investments across hundreds, if not thousands of companies, increasingly relying on short-term share trading to generated gains. ” Pamphlet author Janet Williamson: “the shareholders of a large listed company will number in the thousands (or) tens of thousands. …it can be difficult for a company even to get full information on who owns their shares. ”