Inequality of income: A matter for socially responsible business? Leanne Holdsworth Holistic Business Solutions Ltd

Is there Inequality? Level of inequality* in NZ has been increasing over time Inequality in NZ is higher than the OECD median - 18 th out of 25 countries More unequal than Australia, UK, Canada More equal than USA *(as measured by Gini coefficient and NZ disposable household income) (The Social Report, 2007)

Is there Inequality? Proportion of NZ population with housing cost outgoings- to-income ratio greater than 30%: –10.6% in 1998 –21.4% in 2004 (The Social Report, 2007) Child Poverty –Relative income poverty (children), NZ is 18 th out of 24 OECD countries (Unicef 2007)

What impact does this have? Health Outcomes Social Relations

Health outcomes The higher people’s status, the longer they live Within each of the developed countries average life expectancy is five, ten or fifteen years shorter for people living in the poorest areas compared to those in the richest. Life expectancy in 25 or 30 richest countries is no longer related to how rich they are –(Wilkinson, 2005) In NZ in 2000 males in the least deprived 10 th percentile of areas could expect to live 9.5 years longer than males in most deprived 10 th percentile of areas –(Tobias and Cheung, 2003).

Social Relations Research says quality of social relations is better in more equal societies: –People are more likely to trust each other –Community life is stronger –Homicide rates lower –Other violent crime lower –Racial prejudice lower –Domestic violence lower

What is it about us which means that inequality can affect health? Continued effect of stress on biology –Low social status is a stressor –Low status and depression both feature low seratonin –When arousal sustained for long periods immune functioning suppressed Search for status Control over work

What is it about us which means that inequality can affect social relations? Most frequent trigger to violence is people feeling they are disrespected and threatened with a loss of face Issues of status and respect become more problematic when there is more inequality Where income differences are greater, things that serve as markers of status and command respect are missing for those at the bottom Social stigma through relative deprivation

Questions for consideration Is inequality relevant for businesses that are actively looking to be socially responsible? What if anything can socially responsible business do to reduce inequality? Can business be socially responsible whilst at the same time trying to increase consumption by consciously or otherwise playing on insecurities (of status)?

An unreasonable challenge? “Money enables people to buy a sense of superiority…. The fault of course is not in our desire to be valued by others. Rather it is the commercial exploitation, within a framework of ranking and inequality of the unsatisfied need to be valued.” (Wilkinson 2007)