According to recent research from Oxfam, the richest 85 people in the world have as much wealth as the poorest 3.5 billion – or half the world’s entire population. It’s an almost cartoonish figure, a wild accounting aberration perhaps or a statistical glitch, but this couldn’t possibly be accurate, could it?
For most, the enormity of this economic inequality is almost incomprehensible. But for those of us who have studied its astronomical rise since the late 1970s, it’s far less surprising.
In the UK the growth in inequality has been particularly startling. In 1979 the richest tenth of the UK population received a 21 per cent share of income. In 2010 they received 31%. If fact, if inequality remained as it was in 1979, the bottom fifth would be almost £2,000 better off today.
Wealth has effectively flown upwards rather than trickled down, and the UK has sunken into a mire of low paid, low security jobs and eye-watering executive pay – a nation of food banks and banker’s bonuses.
Perhaps, as we are told, this is solely a result of the ingenuity, entrepreneurial spirit and hard graft of the wealthiest. But what of the hard work of everyone else, work that increasingly goes unrewarded.
If this sounds defeatist, there are at least some encouraging signs that people are tuning into the issue of inequality. A more positive story coming from this week’s World Economic Forum involved a survey of its 700 members which identified the growing gap between rich and poor as the biggest threat to global prosperity. Alongside this, prominent academics and economists such as Joseph Stiglitz and Paul Krugman have regularly written on the economically damaging consequences of high inequality. Will Hutton’s excellent recent article for the Observer shows that commentators are also banging on the door of policy makers.
For the first time the cold, hard economic case for reducing inequality is being made by economists and business people alongside the obvious moral and social arguments. The result is that tired old clichés supporting inequality are slowly being eroded. A rising tide does not lift all boats, wealth does not trickle down; and the evidence to prove this is mounting.
Even more significant is the growing number of people who identify inequality as a problem. In a recent British Social Attitudes survey over 80 per cent of people said they believed the income gap between the rich and poor was too large, with nearly 7 in 10 arguing that it was the role of Government to address this.
It is this last point that policy makers must take heed of. For too long inequality has been seen as a secondary concern, often playing second fiddle to the more emotive issue of poverty. The reality is that poverty is a symptom of inequality, and many of the issues that the public are concerned about, from the housing crisis to crime, the obesity epidemic and unsustainable living costs, are exacerbated when inequality is excessive.
There is a golden opportunity for politicians to recognise the zeitgeist and adopt inequality reduction as a key aim. Not only does it bind many other policies and issues they are looking into, it is a vote winner. It’ll just take some guts and common sense.
– Kate Pickett
This blog was originally posted on the Class blog