‘Why Greater Equality Makes Societies Stronger’ Richard Wilkinson and Kate Pickett, bestselling authors of “The Spirit Level: Why Equality Is Better for Everyone”.

1. What World Leaders are saying…
Income inequality is the “defining challenge of our time”. “…rising
inequality and declining mobility are also bad for our families and social
cohesion – we…trust our institutions less (and) trust each other less when
there’s greater inequality. And greater inequality is associated with less
mobility between generations.” President Barak Obama, 4th
Dec 2013
“Inequality is the root of social ills.” Pope Francis, 24th
Nov 2013
“…the economics profession (has) downplayed inequality for too long. Now
all of us have a better understanding that a more equal distribution of
income allows for more economic stability, more sustained economic
growth, and healthier societies with stronger bonds of cohesion and trust.”
Christine Lagarde, Director, IMF, 23rd
Jan 2013
“Social and economic inequalities can tear the social fabric, undermine
social cohesion and prevent nations from thriving. Inequality can breed
crime, disease and environmental degradation and hamper economic
growth.” Ban Ki-Moon, UN Secretary General, 9th
July 2013

2. Why Greater Equality Makes
Societies Stronger
Pretoria, June 2015
Richard Wilkinson and Kate Pickett
Professors of Social Epidemiology

3. A lecture in three parts:-
• How and why large income
inequalities damage us all
• The relevance of greater
equality to achieving
sustainability
• What can be done to reduce
inequality

4. 4
Bagehot, On equality. The Economist, 19 Aug 2010

6. Social Relations
• Child conflict
• Homicide
• Imprisonment
• Social capital
• Trust
In summary... bigger income gaps lead
to deteriorations in:-
Human Capital
• Child wellbeing
• High school drop outs
• Math & literacy scores
• Social mobility
• Teenage births
Health
• Drug abuse
• Infant mortality
• Life expectancy
• Mental illness
• Obesity

7. Income per head and life expectancy: rich and poor
countries
Source: Wilkinson & Pickett, The Spirit Level
(2009)
National income per person
($)

8. ‘‘Cross-country data show almost no relation
between changes in life expectancy and
economic growth over 10, 20, or 40-year time
periods between 1960 and 2000. Many
countries have shown remarkable
improvements in health with little or no
economic growth...’’
Cutler D, Deaton A, Lleras-Muney A. The Determinants
of Mortality. J Economic Perspectives 2006; 20: 97–
120.

11. Health is related to income differences within rich
societies but not to those between them
Source: Wilkinson & Pickett, The Spirit Level
(2009)
Least
deprived
Most deprived
Within societies

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

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

14. 3.7 3.9
4.3 4.6 4.8
5.2 5.3 5.6 5.6 5.6 5.7
6.1 6.2
6.7 6.8 6.8
7.2
8.5
9.7
4.0
8.0
7.0
3.4
Japan
Finland
Norway
SwedenDenmark
Belgium
AustriaGermanyNetherlands
Spain
France
CanadaSwizterland
Ireland
Greece
Italy
Israel
New
ZealandAustralia
UK
Portugal
USASingapore
Income gaps
How many times richer
are the richest fifth than
the poorest fifth?
Wilkinson & Pickett, The Spirit Level www.equalitytrust.org.uk
Inequality...
How much richer are the richest 20% in
each country than the poorest 20%?

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

16. ickett & Wilkinson, Pediatrics, 2015, doi:10.1542/peds.2014-3549E

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

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

19. Male mortality (25-64 yrs) and income inequality in US
states and Canadian provinces.
Source: Ross NA, Wolfson MC, Dunn JR, Berthelot JM, Kaplan GA,
Lynch JW. British Medical Journal 2000;320:898-902

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

21. Homicide Rates in relation to Income Inequality

22. 0
30
60
90
120
150
180
Income Inequality
Homicidespermillionpeople
Low High
Daly M, Wilson M, Vasdev S. Income inequality and homicide rates in Canada and the United States. Can J Crim 2001; 43: 219-36.
Homicide rates are higher in more unequal
US states and Canadian provincesUSA states
Canadian provinces

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

25. Income inequality and school bullying by 11-
year-olds in 37 countries (r = .62)
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):

26. Social Mobility is lower in countries with
bigger income differences

27. 27
Literacy Scores of 16-25 year olds by
Parents' Education
-1.5
-1
-0.5
0
0.5
1
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Parents' Education (years)
Literacyscore
Sweden
Canada
United States
Source: Willms JD. 1997. Data from OECD Programme for International Student Assessment.

28. Relation between infant mortality and GNP p.c.
at high, medium and low income inequality
Hales S, Howden-Chapman P, Salmond C, Woodward A, Mackenbach J..
Infant mortality, gross national product & income distribution. Lancet 1999;
354: 2047

29. Bigger material differences create bigger social
distances and increase social class differentiation

30. Layte R, Whelan CT. Who Feels Inferior? A Test of the Status Anxiety Hypothesis of
Social Inequalities in Health. European Sociological Review, 2014.
Status Anxiety across income deciles for
high, medium and low inequality countriesStatusAnxiety
Income deciles
Societies with:-
High inequality
Medium inequality
Low inequality

31. Two recent studies show that inequality
increases conspicuous consumption
and consumerism
•People in more unequal areas of the USA
are more likely to buy high status cars
•Data from internet searches shows that
people in more unequal states are more
likely to search for status goods

32. Source: Bowles S, Park Y. Economic Journal 2005; 115 (507): F397–F412. 2005.
Working hours are longer in more unequal countries

33. Iacoviello M. Household Debt and Income Inequality, 1963–2003. Journal of Money, Credit
and Banking 2008;40(5):929-65.
Household Debt and Income Inequality USA

34. 0
0.2
0.4
0.6
0.8
1
Other
tasks
Tasks with ‘social
evaluative threat’
(uncontrollable)
Cortisolresponse(effectsize)
Dickerson SS, Kemeny ME. Acute stressors and cortisol
responses. Psychological Bulletin 2004; 130(3): 355-91.
What kind of stressful tasks raise
stress hormones most?

35. Stereotype Threat
The effect of caste identity on children's performance
Caste
Unannounced
Caste
Announced
0
1
2
3
4
5
6
High Caste
Low Caste
Numberofmazessolved
Source: Hoff K, Pandey P, World Bank Policy Research Working Paper 3351, June 2004

36. Robert Sapolsky, Neuro-anatomist at Stanford
with a friend from the Serengeti

37. 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 self-
perceptions 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.”

38. 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.
Depression is more common in more unequal states
Percentofpopulation
depressedinpast2weeks
Income Inequality (Gini)

39. Loughnan S, et al. Economic Inequality is linked to biased self-perception.
Psychological Science, 2011; 22: 1254
Self enhancement increases in more unequal
societies

40. Inequality data from World Top Incomes Database
Narcissism data from Twenge JM, et al., Journal of Personality 2008; 76(4): 875-901.
NarcissimScore(NPI)
Rising Narcissism & Income Inequality in the USA

42. Reducing carbon emissions is seen as an
unwelcome belt-tightening exercise…
But it is an opportunity to increase the real
quality of life for all of us

43. Wilkinson, Pickett, De Vogli. BMJ 2010; 341:1138-1140
CO2 emissions per head (tonnes)
Lifeexpectancy Life expectancy and CO2 emissions per head

44. A Convenient Truth
•material standards are no longer critical
determinants of wellbeing in the rich world
•but research on health and happiness shows
that the quality of social relations and the
social environment has become critical.

45. More equal countries recycle more waste
Source: Wilkinson & Pickett, The Spirit Level (2009)
Australia
France
Germany
Italy
Japan
Portugal
Spain
Sweden
Switzerland
UK
USA
Best
Worst
Recycling(averagerank)
Low High
Income Inequality

46. More Unequal Countries Emit More C02
om: Wilkinson RG, Pickett KE. The impact of income inequalities on sustainable development in London.
eport written on behalf of The Equality Trust, commissioned by the London Sustainable Development Commission, 2010, http://www.londonsdc.org/lsdc/research.as

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

48. 48
“Growth is a substitute for equality of
income. So long as there is growth there
is hope, and that makes large income
differentials tolerable.” - Henry Wallich,
former governor of the US Federal Reserve Bank
and professor of economics at Yale.
But...if growth and equality are
substitutes, then equality maybe a
precondition for a steady-state economy.

49. %ofallincometakenbyrichest
1%
Data: Atkinson A, Piketty T, Saez E. Drawn by Acemoglu D, Robinson J, Why
Nations Fail.
Changing share of all
income taken by the
richest 1%
USA
UK
Germany
Sweden
NetherlandsFrance

50. 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.
Trade Unions membership (% workforce) and
Share of Income going to top 10% (USA, 1918-2008)
50

51. Countries with stronger Trade Unions are less unequal
(data for 16 OECD countries 1966-1994)
Inequality(Gini)
% 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.

52. Mishel L, Sabadish N. Economic Policy Institute Brief #331. Washington, May 2012
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 by17%

53. Pay differentials
• Pay ratios in British public sector
usually between 1:10 and 1:20
• Average pay ratio in largest 100 UK
companies 1:300
• Mondragon Cooperatives (employing
75,000) 1:6
• Swiss Referendum (Nov 2013) on
limiting pay differentials to 1:12

54. Fairness Commissions
Set up in 17 major UK cities to report
on reducing income differences locally.
Living Wage Commission
Chaired by the Archbishop of York.
1480 companies have become living
wage employeers.
The Scottish Government signed up
today!

56. The Problem of Tax Havens
In 2005, the Tax Justice Network estimated
that wealthy individuals may hold $11.5
trillion of wealth in off-shore tax havens.
This is about a quarter of all global wealth, or
about equal to the Gross National Product of
the USA.
Tax havens handle (on paper) as much as half
of all world trade and banking assets and a
third of all foreign investment.

57. In 2010 the IMF estimated that the
balance sheets of small island financial
centres added up to $18 trillion (about
1/3 of world GDP)
In 2008 the US Government
Accountability Office reported that 83 of
the USA’s biggest 100 corporations had
subsidiaries in tax havens.
The Tax Justice network said 99 of
Europe’s largest 100 companies also
used tax havens

58. 34 tax havens, including Switzerland,
Singapore, Cayman Islands and Jersey,
reached agreement with OECD in 2014 to
share information on bank accounts with
national governments for tax purposes.
(Operative from 2017)
13 other tax havens remained without
agreement.
Plans were being drawn up for sanctions
against non-compliant countries.

59. Brands owned by the ‘big ten’ food multinationals
Oxfam and www.behindthebrands.org

60. “And so, while the end-of-the-world scenario will be rife
with unimaginable horrors, we believe that the pre-end
period will be filled with unprecedented opportunities for
profit”

61. An impossible task?
Reducing CO2 emission and
environmental damage while
business continues to maximise
sales and consumers continue to
maximise incomes and
consumption
61

62. Naomi Klein
This Changes
Everything:
capitalism
versus climate

63. Anti-social actions of multinational corporations
•Undemocratic concentrators of wealth and power
•Maximising sales and consumption - throughput
•Tax avoidance
•Protecting profits against scientific evidence
safeguarding the public interest (climate change,
pharmaceuticals, tobacco, guns, pesticides, food
standards etc.
•Regulatory capture
•Subverting the democratic process – buying
politicians
•Running rings round national governments

64. Trade Union Congress pamphlet, Workers
on Board, on employee representation.
In 1960s most shares were owned by individuals with a
longer term interest in a few companies. But…
“UK institutional investors… spread their investments
across hundreds, if not thousands of companies,
increasingly relying on short-term share trading to
generated gains.” TUC Gen Sec Frances O’Grady:
“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.” Janet Williamson (pamphlet author)

65. Economic democracy
(employee owned companies, coops, mutuals)
•“turns companies from being pieces of
property into communities”
•reduces pay ratios within companies
•transforms the experience of work
•redistributes wealth & reduces unearned
income
•improves productivity
•is more socially & environmentally
responsible
…Boards might include employee, community and
consumer representatives

67. Employee Owned Companies
in the UK
The number of employee owned
companies has increased by 9% in each
of the last three years (under a
Conservative led coalition government)
Employee Owned Companies are on
target to make up 10% of UK GNP by
2020.

68. How to expand the democratic sector
(i.e. employee owned companies, coops, mutuals)
• Stronger legislation for employee representation
on company boards (as in some EU countries)
• Government loans for employee buyouts
• Tax concessions for democratic businesses
• Take our custom to the democratic sector
• If each year 2% of company shares were
transferred to an employee controlled trust, they
would be majority shares holders in 25 years

69. Building a leisure society
•Richer countries should use increases in
productivity to increase leisure rather than
consumption.
•Just as greater inequality increases working hours
and consumerism, greater equality will give us
more leisure
•More time for friends, family and community will
increase the real qualityof life

70. We can…
•Transform social relations and community life
by increasing equality
•Transform experience of work by more
democratising economic institutions
•use productivity gains to increase leisure rather
than income by decreasing inequality
•Raise the quality of life by meeting social needs
•Achieve sustainability

71. 71
http://www.equalitytrust.org.uk
For more information:
… a book
and a
website…

72. http://www.fabians.
org.uk/publications/
a-convenient-truth/

74. The contextual effect of income inequality in the 50
states of the USA is stronger for death rates with
steeper social gradients
Wilkinson & Pickett, American Journal of Public Health, 2008; 98(4):
699-704
r = -0.814; p =
0.004

75. “Take me as an example. I happen
to have a talent for allocating
capital. But my ability to use that
talent is completely dependent on
the society I was born into. If I'd
been born into a tribe of hunters,
this talent of mine would be pretty
worthless. I can't run very fast. I'm
not particularly strong. I'd probably
end up as some wild animal's
dinner.”
Warren Buffett ….to Barack Obama in 2006