Jonathan Bradshaw William Temple Association York 18 November 2018 Inequality gets to us Jonathan Bradshaw William Temple Association York 18 November 2018

Outline How do we measure inequality Trends in inequality Impact of inequality on society Pickett and Wilkinson The Spirit Level The Inner Level Impact of redistribution Impact of austerity

Lorenz curve – gini coefficient Percentage of income 50% 30% 50% Percentage of population

Trends in inequality 1961-2016/17

Shares of total gross income received by the top 20% and the bottom 40% 1977-2016/17.

Inequality in the OECD

Why does inequality matter Social justice arguments - Rawls Associated with poor outcomes

The Spirit Level Income inequality is linked to a wide range of health and social problems The effects are large – there are big differences between societies Not only the poor are affected, inequality affects the whole population

Inequality and infant deaths

Inequality and crime

Inequality and child well-being

The Inner Level shows: How income inequality strengthens the grip of class and status How popular myths about human nature and capabilities are used to justify inequality How we can tackle inequality and why it is vital we do so if we are to make the transition to sustainable wellbeing

Pyschology Social anxieties Feelings of self worth Doubt, lack of self esteem, confidence Withdrawal from social engagement Depression, suicide Reinforced by class and status Delusions of grandeur of the better off Justified by myths about meritocracy and genetics Reinforced by consumption Income inequality at the heart of it all

There is more mental illness in unequal societies

There is more depression… Redrawn from data in: Messias E, Eaton WW, Grooms AN. Economic grand rounds: Income inequality and depression prevalence across the United States: an ecological study. Psychiatric Services. 2011;62(7):710-712.

…and more schizophrenia Burns JK, et al.. Int J Soc Psychiatry, 2013; 60(2), 185–96.

More people exaggerate their self-importance… Redrawn from data kindly provided by Peter Kuppens and Steve Loughnan et al . Economic inequality is linked to biased self-perception. Psychological science. 2011;22(10):1254-1258.

….and become more narcissistic College students’ Narcissistic Personality Inventory scores over time reflect the rise in US income inequality

There is more advertising in more unequal countries

Conspicuous consumption

Money and consumerism become more important Redrawn from data kindly provided by Iacoviello M. Household Debt and Income Inequality, 1963–2003. Journal of Money, Credit and Banking. 2008;40(5):929-965.

Addictive behaviour increases: e.g., gambling

Inequality increases anxieties about status Redrawn from data kindly provided by Richard Layte: Layte R, Whelan C. Who feels inferior? A test of the status anxiety hypothesis of social inequalities in health. European Sociological Review. 2014;30:525-535

From inequality to insecure self-worth and mental illness Income inequality Decline in community life Social evaluative threat, challenge to self-worth Anxiety consumerism alcohol drugs Narcissism Sociopathy Psychoses Schizophrenia Low self-esteem, depression

Drivers of inequality The primary distribution of income and wealth Especially recently what has been happening to top salaries. This is mitigated by redistribution Vertical, horizontal, gender, spatial, lifecycle, generational Redistribution not very progressive

2016-2017 Non retired households with children % of gross income paid in tax

Gini coefficients for the distribution of income at each stage of the tax-benefit system for all households, 1977-2016/17, UK Table 6

Summary of the effects of taxes and benefits on ALL households by quintile group, 2016/17

Combined impact of tax and welfare reforms as percentage of net household income according to family type Reed, H. and Portes, J. (2014) Cumulative Impact Assessment. A research report by Landman Economics and the National Institute of Economic and Social Research for the Equality and Human Rights Commission. Research report 94. http://www.equalityhumanrights.com/sites/default/files/publication_pdf/Cumulative%20Impact%20Assessment%20full%20report%2030-07-14.pdf

Austerity impact on children £37 billion per year taken out of social security spending since 2010/11 Much of it given away in tax cuts Losses mainly concentrated on children Poverty rates and poverty gaps both increasing rapidly Many outcomes already deteriorating: infant mortality, child homelessness, children in care, child mental health, child subjective well-being… Much more to come – two child limit, benefit cap, roll-out of UC Please read the UN Special Rapporteurs’s report published two days ago. Devastating!!!