May 12, 2015

Richard Wilkinson and Kate Pickett

Green Army: Persons of Interest

Richard Wilkinson & Kate Pickett:
Over the next generation or so, politics seem likely to be dominated either
  • by efforts to prevent runaway global warming or, if they fail,
  • by attempts to deal with its consequences.
(The Spirit Level, 2009, p 215)

Richard Wilkinson (1943):
[Status differentiation has] deeply ingrained psychosocial effects.
[Inequality is] not just about poverty [or] unfairness.
Its about a response to social hierarchy, social ranking …
It's also about whether people feel valued or devalued.

[In] the Financial Times 100 companies that go into the share index, the average pay difference between the CEO at the top and the lowest paid full time worker, is about 300 to 1.
There's no more powerful way of telling a whole swathe of the population:
You people are worth almost nothing!
Than to pay you one third of 1% of what the CEO gets.
And then of course we say:
The problem with the poor is low self-esteem!
(Inequality and Progress, Big Ideas, ABC Radio National, 5 February 2014)

Richard Wilkinson & Kate Pickett

Economic Justice and Security

In the USA, a child is killed by a gun every three hours.
(p 132)

[The] most powerful sources of stress affecting health [are:]
  • low social status,
  • lack of friends, and
  • stress in early life.
(p 39)

Figure 16.2
The widening gap between the incomes of the richest and poorest 10% in the USA 1975 (=1) to 2004.

[Inequality in the USA rose] through the 1980s to a peak in the early 1990s.
The [rest of the 1990s] saw an overall decline … with an upturn since 2000.
[The] downward trends [in violence and teenage births] through the 1990s were consistent with improvements in the relative incomes of people at the very bottom of the income distribution.
(p 142)

[In] 1978 there were over 450,000 people in jail [in the USA.]
[By] 2005 there were over 2 million: [a four-fold increase.]
In the UK, the numbers have doubled since 1990, climbing from around 46,000 to 80,000 in 2007.
(p 145)

[In the US only] 12% of growth in state prisoners between 1980 and 1996 could be put down to increases in criminal offending (dominated by a rise in the drug-related crime).
… 88% of increased imprisonment was due
  • to the increasing likelihood that convicted criminals were sent to prison rather than being given non-custodial sentences, and
  • to the increased length of prison sentences.
In federal prisons, longer prison sentences are the main reason for the rise in the number of prisoners.
‘Three-strikes’ laws, minimum mandatory sentences and ‘truth-in-sentencing’ laws (ie, no remission) mean that some convicted criminals are receiving long sentences for minor crimes.
In California in 2004, there were 360 people serving life sentences for shoplifting.
(p 147)

The ratio [of the risk of imprisonment of blacks versus whites] is 6.04 for the USA as a whole and rises to 13.15 for New Jersey. …
[In terms of patterns of youth offending:]
  • 25% of white youths in America have committed one violent offence by age 17, compared to 36% of African-Americans,
  • ethnic rates of property crime are the same, and
  • African-American youth commit fewer drug crimes.
[And yet] African-American youth are overwhelmingly more likely
  • to be arrested,
  • to be detained,
  • to be charged,
  • to be charged as if an adult and
  • to be imprisoned.
The same pattern is true for African-American and Hispanic adults, who are treated more harshly than whites at every stage of judicial proceedings.
Facing the same charges, white defendants are far more likely to have the charges against them reduced, or to be offered ‘diversion’ — a deferment or suspension of prosecution if the offender agrees to certain conditions, such as completing a drug rehabilitation programme.
(p 150)

[In] more equal countries and societies, [it seems that legal frameworks and penal systems] are developed in consultation with experts — criminologists, lawyers, prison psychiatrists and psychologists, etc, and so reflect both theoretical and evidence-based considerations of what works to deter crime and rehabilitate offenders.
[Whereas, in] more unequal countries and states [the policy response is driven by] media and political pressure [to be seen to be] tough on crime … rather than considered reflection on what works and what doesn’t.
(p 155)

[After] slowly increasing from 1950 to 1980, social mobility in the USA declined rapidly, as income differences widened dramatically in the later part of the century.
(p 160)

The Future of Equality

[If] the United States was to reduce its income inequality to something like the average of the 4 most equal of the rich countries (Japan, Norway, Sweden and Finland),
  • the proportion of the population feeling they could trust others might rise by 75% — presumably with matching improvements in the quality of community life;
  • rates of mental illness and obesity might similarly each be cut by almost two-thirds,
  • teenage birth rates could be more than halved,
  • prison populations might be reduced by 75%, and
  • people could live longer while working the equivalent of two months less per year.
(p 261)

{We know that more egalitarian countries live well, with high living standards and much better social environments.}
[So we should not] allow ourselves to be cowed by the idea that higher taxes on the rich will lead to their mass emigration and economic catastrophe. …
Nor should we allow ourselves to believe that the rich are scarce and precious members of a superior race of more intelligent beings on whom the rest of us are dependent.
That is merely the illusion that wealth and power create.

Rather than adopting an [undeserved] attitude of gratitude towards the rich, we need to recognize what a damaging effect they have on the social fabric. …
[In the lead up to the 2008 financial crisis, the] huge salaries and bonuses at the top … increased the pressure to consume as everyone else tried to keep up.
The long speculative boom which preceded the … crash was fuelled substantially by the growth of consumers’ expenditure.
(p 262)

By adding to the speculative element in the cycles of economic boom and bust, great inequality shifts our attention from the pressing environmental and social problems and makes us worry about unemployment, insecurity, and ‘how to get the economy moving again’.
Reducing inequality would not only make the economic system more stable, it would also make a major contribution to social and environmental sustainability.

Modern societies will depend increasingly on being creative, adaptable, inventive, well-informed and flexible communities, able to respond generously to each other and to needs wherever they arise.
Those are characteristics not of societies in hock to the rich, in which people are driven by status insecurities, but of populations used to working together and respecting each other as equals. …

[To achieve this, we need] to bring about shift in public values so that instead of inspiring admiration and envy, conspicuous consumption is seen [for what it really is:] a sign of greed and unfairness which damages society and the planet.
(p 263)

[The] evidence shows that even small decreases in inequality, already a reality in some rich market democracies, make a very important difference to the quality of life. …
[We need] to stand up to the tiny minority of the rich whose misplaced idea of self-interest makes them feel threatened by a more democratic and egalitarian world.
(p 264)

We are on the verge of creating a qualitatively better and more truly sociable society for all.
(p 265)

Corporate Power

In 2007 chief executives of 365 of the largest US companies received well over 500 times the pay of their average employee, and these differences were getting bigger. …
(p 242)

In many of the top companies the chief executive [receives more in a] day than the average worker [earns] in a year.
Among the Fortune 500 companies the pay gap in 2007 was close to ten times as big as it was in 1980, when the long rise in income inequality was just beginning. …

[International estimates suggest] that ratios of CEO compensation to the pay of production workers in manufacturing might be
  • 16:1 in Japan,
  • 21:1 in Sweden,
  • 31:1 in the UK and
  • 44:1 in the USA. …

The average pay (including bonuses) for the chief executives of top [UK companies in 2007] stood at just under £2.9 million [— up 37% from the year before.]
[An analysis by] the International Labour Organization concluded that there is little or no evidence of a relationship between executive pay and company performance and suggested that these excessive salaries are likely to reflect the dominant bargaining position of executives. …

In the USA, the twenty highest-paid people working in publicly traded corporations received almost 40 times as much as the twenty highest-paid people in the non-profit sector, and 200 times more than the twenty highest-paid generals or cabinet secretaries in the Federal Government. …
(p 243)

It [is] common practice for CEOs and other senior managers to receive huge salary increases shortly after [the privatization of state-owned enterprises. …]
United Nations Conference of Trade and Development:
Twenty-nine of the world’s 100 largest economic entities are transnational corporations (TNCs) …
Of the 200 TNCs with the highest assets abroad in 2000, Exxon is the biggest in terms of value added ($63 billion).
(p 244)

Research that looked at a large number of British companies during the 1990s found that employee share-ownership, profit-sharing and participation each make an independent contribution to increased productivity [but only when used in combination — they had little lasting impact when used in isolation.]
(p 249)

[The] Mondragon Corporation in the Basque region of Spain [combines] over 120 employee-owned co-operatives with 40,000 worker-owners and sales of $4.8 billion US dollars.
Mondragon co-operatives are twice as profitable as other Spanish firms and have the highest labour productivity in the country.
(p 251)

(The Spirit Level, Penguin, 2009)


The Spirit Level

Economic Justice and Democracy

Would you like to know more?

Richard Wilkinson (1943) [1] and Kate Pickett (1965) [2}

  1. Professor Emeritus, University of Nottingham Medical School.
  2. Professor of Epidemiology, Department of Health Sciences, University of York

  • The psychological effects of inequality, RSA, 5 June 2018.
  • Inequality is bad for everyone, why isn't it getting better?, RSA, July 2017.
  • Questions and Answers, TED, October 2011.
    Richard Wilkinson (1943).

    [The] quality of democracy … deteriorates with greater inequality.
    People [become disillusioned with the political system and] trust politicians less and less.
    Paul Krugman has shown that the political divide in the USA increases with greater income differences.
    [When] income differences were smaller, there was much more overlap in voting … between Democrats and Republicans …
    [Now] the political system [sometimes] seems locked in impossible disagreements, unable to make decisions.

    [Fewer] people vote when there’s more inequality.
    [The feeling is] that “what these rich people at the top get up to is nothing to do with you” [and that] “one lot’s as bad as the other”. …

    [The] problems that are common at the bottom of societies are more common in more unequal societies …
    [Income differences amplify] the effects of social status differentiation. …
    [Studies] have shown tenfold differences
    • in homicide,
    • in teenage birth rates and
    • in the proportion of the population in prison
    — all related to inequality.

    Those differences are so large [that it] affects the social fabric from top to bottom.
    [Even] among the well-off there is a benefit of living in a more equal society.
    Perhaps you’d live a bit longer, your children would do a bit better at school, they’d be less likely to get involved in drugs …

    {Status becomes … much more important in a more unequal society.}
    In more unequal societies, people [feel the need to] rate themselves higher. …
    [Children] tend to have higher aspirations — but they’re completely unrealistic aspirations. …
    In more equal societies, it may still be acceptable to be a skilled craftsman without being regarded as a loser.

    Our societies have changed radically [over a few decades] in the way we view racism [and] homophobia …
    [We’ve] got to do the same with [inequality.]
    Make people at the top feel that this is an antisocial way of behaving, and they will be regarded as greedy, self-serving and selfish.

    [We] also need [to make] structural changes …
    CEOs in many large corporations … pay themselves three hundred or more times as much as the lowest-paid … in the same company.
    [We] need to make people at the top more accountable to [their employees] and to the community.
    You can do that by having employee representatives on company boards, or by having [greater] economic democracy — more employee-owned companies, cooperatives, mutual societies and friendly societies.
    [The] kinds of companies [that] have much smaller income differences within them.

  • How economic inequality harms societies, TED, July 2011.
    Richard Wilkinson (1943).

    [Life] expectancy against gross national income:
    [Countries] like Norway and the USA, are twice as rich as Israel, Greece [and Portugal.]
    And [yet] it makes no difference to their life expectancy …

    But if we look within our societies, there are extraordinary social gradients in health running right across society. …
    [Income] means something very important within our societies, and nothing between them. …

    [In] the more equal countries [—] Japan, Finland, Norway, Sweden the top 20% are about three and a half, four times as rich as the bottom 20%.
    [At] the more unequal end — UK, Portugal, USA, Singapore — the differences are twice as big. …

    [We compiled] data on
    • life expectancy,
    • kids' maths and literacy scores,
    • infant mortality rates,
    • homicide rates,
    • proportion of the population in prison,
    • teenage birthrates,
    • levels of trust,
    • obesity,
    • mental illness …
    • drug and alcohol addiction [and]
    • social mobility.
    [into] one index. …

    The more unequal countries are doing worse on all these kinds of social problems.

    Health and social problems are worse in more unequal countries
    (Wilkinson & Pickett, The Spirit Level, 2009)

    It's an extraordinarily close correlation.
    [If] you look at that same index … in relation to GNP per capita [or] gross national income [there's] no correlation. …

    The average well-being of our societies is [no longer] dependent … on national income and economic growth.
    [It's still] very important in poorer countries, but not in the rich developed world.
    • [Trust:]
      [At] the more unequal end, it's about 15% of the population who feel they can trust others.
      [In] the more equal societies, it rises to 60% or 65%.
    • [Mental illness:]
      [It] goes from about 8% up to three times that …
    • [Violence:]
      [From] 15 homicides per million up to 150. …
      [From] about 40 to 400 people in prison [mostly due harsher sentencing]. …
      [And the] more unequal societies are more likely … to retain the death penalty.

      [Big differences in the rates of] children dropping out of high school. …
      Extraordinarily damaging, if you're talking about using the talents of the population.
    • [Social mobility:]
      [If] Americans want to live the American dream, they should go to Denmark! …
    [Across the board, these problems are] anything from twice as common to 10 times as common. …

    Sweden has huge differences in earnings, and it narrows the gap through taxation [and a generous] welfare state …
    Japan … starts off with much smaller differences in earnings before tax.
    It has lower taxes [and] a smaller welfare state.
    [In] our analysis of the American states, we [found] the same contrast.
    [Some states] do well through redistribution [while others] do well because they have smaller income differences before tax.

    [It doesn't matter how you get] greater equality, [just] as long as you get there somehow. …

    [We are seeing] the psychosocial effects of inequality.
    [Feelings] of superiority and inferiority, of being valued and devalued, respected and disrespected.
    [Those] feelings of the status competition that [drive] consumerism [and lead] to status insecurity.
    We worry more about how we're judged and seen by others …
    Social-evaluative judgments increase [as does] the fear of those … judgments.

    [Psychological studies have shown that] social-evaluative threat — threats to self-esteem or social status in which others can negatively judge your performance [—] have a very particular effect on the physiology of stress. …

    [Chronic] stress from social sources [affects] the immune system [and] the cardiovascular system. …

    [We have the opportunity to] improve the real quality of human life by reducing the differences in incomes between us.

  • The Spirit Level, Penguin, 2009.
    Richard Wilkinson & Kate Pickett.

    Dysfunctional Societies

    Across whole populations, rates of mental illness are five times higher in the most unequal compared to the least unequal societies.
    [Likewise,] in more unequal societies people are
    • five times as likely to be imprisoned,
    • six times as likely to be clinically obese, and
    • murder rates may be many times higher.
    The reason why these differences are so big is … because the effects of inequality are not confined … to the least well-off: … they affect the vast majority of the population.
    (p 181)

    In the 1950s, health in the USA was only surpassed by a few countries.
    Japan on the other hand did badly.
    But by the 1980s Japan had the highest life expectancy of all developed countries and [while the USA] was well on the way to its current position as number 30 in the developed world.
    Crucially, Japanese income differences narrowed during the forty years after the Second World War.
    Its health improved rapidly, overtaking other countries, and its crime rate … decreased.
    Meanwhile, US income differences widened from about 1970 onwards.
    (p 188)

    [Those] in more unequal societies do worse than those on the same income in more equal societies.
    (p 190, emphasis added)

    [Social] relationships (as measured by social cohesion, trust, involvement in community life and low levels of violence) are better in more equal societies.
    (p 192)

    Social status stratification, like ranking systems or pecking orders among animals, are fundamentally orderings based on power and coercion [and] privileged access to resources [—] regardless of others’ needs. …
    Friendship is almost exactly the opposite kind of relationship.
    It is about reciprocity, mutuality, sharing, social obligations, cooperation and recognition of each other’s needs.
    (p 196-7)

    Less hierarchical societies are less male-dominated so … the position of women is better.
    [The] quality of social relations … is less hostile [and punitive.]
    People trust each other more … community life is stronger [and] there is less violence …
    (p 200)

    [Human social interaction is based on] a basic set of social skills such as the ability
    • to recognize and distinguish between faces,
    • to use language,
    • to infer each other’s thoughts and feelings from body language,
    • to recognize each other’s peculiarities,
    • to understand and heed what are acceptable and unacceptable ways of behaving in our society,
    • to recognize and manage the impressions others form of us …
    • to make friends and
    • to handle conflict.

    [Human beings have] different mental [skill sets adapted] to operate both in dominance hierarchies and in egalitarian societies.
    Dominance and affiliative strategies are part of our deep psychological make-up.
    (p 203)

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