Equality Trust Blogs

Oxfam Policy and Practice report: Left behind by the G20?

Laura Vanderbloemen — Thu, 02 Feb 2012 17:50:30 +0000

Oxfam’s recent report “Left behind by the G20?” brings into focus the issue of inequality and its relationship to economic growth.

It is often thought that large inequalities in income are needed for economic growth, but recently that idea has been called into question. Brazil, Korea, Mexico and Argentina have all sustained growth in the past decade while also seeing inequality decrease.

In fact, one of Oxfam’s arguments is that inequality is a barrier to growth, and the idea that large inequalities are needed for growth is outdated. As evidence they refer to a group of studies (1-4 below) and also discuss what has happened in case studies over the past decade in South Africa, Mexico and Brazil. Two of these (Brazil and Mexico) have seen inequality drop in the past decade. South Africa has not. Oxfam’s report focuses on reduction of poverty, and they project that further reductions in inequality in Brazil, for example, could bring around 2.5 million more people out of poverty.

"The results are dramatic across the three case study countries: Brazil, Mexico, and South Africa. In Brazil and Mexico, reductions in inequality could see absolute income poverty virtually eliminated. However, if inequality is instead allowed to creep back up, the model predicts that reductions in extreme poverty would be minimal or even non-existent. In our scenarios, strong economic growth in South Africa will not stop the number of people living in poverty increasing by 2020 unless inequality is brought under control." Oxfam Briefing Paper 157

Sustainability is also discussed in the report. Not only does environmental degradation exacerbate social inequalities as Oxfam’s report explains, but sustainability in rich countries may also be endangered. Smaller carbon footprints have not prevented some countries from reaching the highest levels of life expectancy, and extra economic growth in the richest countries may not continue to produce real improvements in quality of life (5).

As India’s Prime Minister, Manmohan Singh recently said, “rapid growth will have little meaning . . . unless social and economic inequalities, which still afflict our society, are not eliminated quickly and effectively (6).”

Given increases in life expectancy and quality of life in most countries, progress in these areas across all countries seems possible. Oxfam’s report provides a wealth of evidence, possibilities and plans for a shared future.

References:

1. K. Deininger and L. Squire (1998) ‘New ways of looking at old issues:
inequality and growth’, Journal of Development Economics 57(2):259-287

2. A. Alesina and D. Rodrik (1994) ‘Distributive Politics and Economic Growth’,
The Quarterly Journal of Economics 109(2):465-90

3. Benabou R. (1996) ‘Inequality and Growth’ Working Papers 96-22, C.V. Starr
Center for Applied Economics, New York: New York University

4. Banerjee A. and E. Duflo (2003) ‘Inequality and Growth: what can the data
say?’ NBER Working Papers, Cambridge: NBER

5. World Bank, World Development Indicators (WDI) September 2006. Economic and Social Data Service International, Manchester: Mimas.

6. Oxfam Great Britain, Policy and Practice. Left behind by the G20?

*The G20 group of countries: South Africa, Canada, Mexico, USA, Argentina, Brazil, China, Japan, South Korea, India, Indonesia, Saudi Arabia, Russia, Turkey, UK, Australia, France, Germany, Italy and the European Union. The International Monetary Fund’s managing director and the World Bank’s president also attend G20 meetings.

A modest proposal for George Osborne…

Bill Kerry — Thu, 26 Jan 2012 11:42:20 +0000

This week it feels like everyone is talking about inequality. From the billionaires at Davos to Nick Clegg and Barack Obama - even Peter Mandelson is less "relaxed" about the issue these days.

However, before we get carried away, we are quickly reminded that corporate excess has not gone away. Some people still don’t get it.

Given the confluence of events, wouldn’t now be a good time for a bit of tax hypothecation? I think we can all think of better places to allocate money than dishing out bonuses to perennially failing banks and bankers. Surely now is the time that Nick Clegg should suggest to George Osborne that the way to speed up help for the squeezed middle is to take it from those who caused - and are prolonging - the squeeze? In fact this squeeze has been going on so long it’s now beginning to feel like a death-grip.

Whether such hypothecation is the right policy for the long term is a matter for debate (personally I would prefer a proper progressive tax system) but the arguments for it would appear to be very strong at the moment. Apart from the beautiful symmetry of it, such a move would be just, popular and fiscally prudent since it involves no borrowing.

What’s not to like, George?

Photo credit: Images_of_Money

New - become a supporter by setting up a monthly donation online

Kathryn Busby — Fri, 20 Jan 2012 16:59:34 +0000

Online monthly giving

It's finally here! The new and improved way to support our campaign with an automatic regular gift.

SET UP YOUR MONTHLY DONATION ONLINE

Until now, the only way to make a regular gift to The Equality Trust was by setting up a standing order.

This involved downloading the form as a PDF file and printing it out, filling in the form and sending it back to us by post....

... many, many thanks to everyone who found time to go through this rather long-winded process. Your support is incredibly valuable as it provides us with a reliable source of income and enables us to plan our future work with confidence.

But now, brand new for 2012, we are delighted to be able to offer a far quicker and easier alternative: automatic recurring donations collected from your credit or debit card.

PLEASE SET UP YOUR MONTHLY DONATION ONLINE TODAY

Supporter Programme

When you start making a regular gift, you automatically join our Supporter Programme and receive:

An Egalitarian badge
Monthly email updates in addition to the quarterly Among Equals newsletter
Priority invitations to events
Free admission to our Supporter Conferences

...and you will be part of the only dedicated campaign to reduce income inequality in the UK.

To convince politicians to act for greater equality, we need to a groundswell of public opinion demanding that the gap between rich and poor is reduced. Please join us. Become a supporter today by setting up your own monthly online donation.

Photo credits: Mindful One (the sparkly blue donation box) & Terence Bermingham (two supporters chatting at our recent conference)

Like smoking over a baby's cot: excessive pay needs to become unacceptable

Bill Kerry — Mon, 09 Jan 2012 14:42:54 +0000

An encouraging start to 2012 has seen leading Lib Dem, Labour and Conservative politicians setting out their plans to rein in excessive executive pay. Jenny Jones from the Green Party has also made the issue of fair pay central to her candidature for London Mayor.

The usual suspects have immediately, and predictably, started to grumble about the prospect of modest reforms that may lead to a curbing of their undeserved wealth and are trotting out the usual tired defences all over again. Let's hope they've cried wolf one too many times.

It is unlikely that the proposed reforms will deliver all of what we want. What is needed, ultimately, is an enduring public ethos that is intolerant of grossly outsized salaries and bonuses, especially during a time of constrained resources and rising inequality and poverty.

We need to encourage a public mood that equates excessive pay and bonuses with other forms of social behaviour that have come, over time, to be seen as unacceptable, distasteful or just plain ridiculous. This mood has probably already had some success in keeping the 50p top rate of tax (although there is clearly all to play for!) and it is our best guarantee of robust policies in the future to tackle the unjust rewards that we know drive our high level of inequality.

Photo credit: wheelzwheeler

The Equality Trust office is now closed until 4th January

Kathryn Busby — Thu, 22 Dec 2011 10:53:29 +0000

Season's Greetings!

The Equality Trust office is now closed until
Wednesday 4th January 2012.

Photo credit: webmink

The Equality Trust making waves in the USA

Bill Kerry — Tue, 13 Dec 2011 17:15:11 +0000

Both The Equality Trust and One Society were featured recently by The Nation magazine in the USA.

With the kind permission of The Nation we reproduce Sam Pizzigati's article here.

It was very interesting to be able to share our experience of campaigning with Sam and to compare the UK and US situations.

Both countries have plotted a disastrous course in the last thirty years, not only towards massive inequality but also towards wrong-headed and pernicious theories that actually attempt to justify that inequality.

It is clear that if we are to advance the case for more equal societies as we head into the twenty-first century it will be essential to win the argument both here in the UK and in the USA.

Original article in The Nation

Is the Big Society in danger of becoming Uglyville?

Bill Kerry — Fri, 09 Dec 2011 10:36:01 +0000

The latest British Social Attitudes survey has detected a hardening of attitudes towards our fellow citizens - especially those who commit the sin of being poor.

I guess this is as unsurprising as it is depressing. As we become more unequal and as the economy falters, this trend will likely get worse. The temptations and invitations to shore up our precarious position in the rat race by kicking down on the less fortunate will surely increase.

And I will go out on a limb here and predict that the chances to prostrate ourselves before money and tedious celebrity will also increase at the same time. Could the two trends be related? I'll stick my neck out and say "yes".

On a brighter note President Obama launched an outspoken attack on the perils of inequality this week and Nick Clegg rattled some sabres over excessive boardroom pay. It is clear, however, that to get to the better and more caring society we all want to see, there's quite a bit to do.

You can play your part by joining us and taking action for a more equal society - and by urging the politicians to back up their words with action.

Photo credit: Hopes and Dreams by Rachael Fallis (winner of our 2011 images of [in]equality photo contest)

Record inequality between rich and poor - watch the OECD video

Kathryn Busby — Mon, 05 Dec 2011 17:36:45 +0000

[youtube:ZaoGscbtPWU]

The gap between rich and poor in OECD countries has reached its highest level for over 30 years, and governments must act quickly to tackle inequality, according to a new OECD report, Divided We Stand.

For more information, visit: www.oecd.org/els/social/inequality

Can we take happy Britons at face value?

Kathryn Busby — Fri, 02 Dec 2011 14:09:38 +0000

Yesterday the government released official figures on the nation's happiness.

Read our co-director Richard Wilkinson's article for Comment is Free in which he gives his view on the survey and what it tells us.

Although we know a little about influences on the happiness of individuals within a population, we know next to nothing about what determines national average levels of happiness. What does it mean that as a nation we score 7 out of 10 for happiness? If you're asked "How satisfied are you with your life nowadays?" or "How happy did you feel yesterday?" – what would you answer? "Mustn't complain … not so bad … could be worse," perhaps?

But if we don't know how to make everyone happier, it's no better guide to policy than asking people how much sunshine they've had recently. The release of official figures on happiness makes it sound as if the government is concerned with our wellbeing, and that it recognises that our wellbeing might not be synonymous with that of the economy. The ONS data shows that on average people currently rate their "life satisfaction" at 7.4 out of 10, despite the fact that the economy probably isn't doing more than about 3 out of 10.

Among Equals - latest newsletter out now

Kathryn Busby — Thu, 01 Dec 2011 17:25:31 +0000

The latest edition of our free supporter newsletter Among Equals is out now.

Read Among Equals - November 2011

The Spirit Level wins prestigious award ... tune in at 9pm Saturday

Craig Griffiths — Wed, 30 Nov 2011 13:06:58 +0000

We are pleased to announce that The Spirit Level has been awarded another prestigious prize.

Co-authors Kate Pickett and Richard Wilkinson, who are also among the co-directors of The Equality Trust, were presented with the Publication of the Year Award at the Political Studies Association Awards last night.

The awards mark the achievements of politicians, academics and journalists over the last twelve months. Professor Matthew Flinders, chair of the awards committee, said:

The Spirit Level was the unanimous choice of a jury of distinguished academics and journalists due to the simple reason that the members considered it to be a brilliant book that had been influential far beyond the academic sphere.

The presentation on the 29th November was led by Jon Snow and will be broadcast on BBC Parliament at 9pm this Saturday.

Kate Pickett said:

We are delighted to win such a prestigious national award for our work. To some extent, what we hoped for when we wrote The Spirit Level and founded The Equality Trust has happened. There is now a much greater awareness of the effects of inequality among the public, policy makers and politicians. There is more debate and more of an appetite for change.

Sadly, however, debate has not yet translated into action. Austerity measures introduced in the wake of the global financial crisis hit hardest those who least deserve them and regulation is resisted by those who have the most vested interests in maintaining their undeserved wealth.

Along with Kate and Richard, The Equality Trust will continue to spread awareness about the damaging effects of inequality and work for a more equal, happier and healthier society.

To begin to translate debate into action, please take a look at our new campaign, Act Local = Reduce The Gap, and email your local councillors.

High Pay Commission report: why tackling high pay is in the national interest

Kathryn Busby — Tue, 22 Nov 2011 17:42:16 +0000

The High Pay Commission published its final report today, Cheques with Balances: why tackling high pay is in the national interest.

Citing a wealth of research and evidence (including The Spirit Level) this report looks at the widening pay gap between the top 0.1% and everyone else, the damaging impact on society and a 12-point plan to address it.

There's a crisis at the top of British business and it is deeply corrosive to our economy. When pay for senior executives is set behind closed doors, does not reflect company success and is fuelling massive inequality it represents a deep malaise at the very top of our society.

High Pay Commission chair, Deborah Hargreaves

Read the full report at the High Pay Commission website.
Support The Equality Trust's new campaign - take action by calling on your local councils and councillors to Act Local = Reduce the Gap.
The High Pay Commission is an independent inquiry into high pay and boardroom pay across the public and private sectors in the UK. The Commission was established by Compass with the support of the Joseph Rowntree Charitable Trust.
The Spirit Level co-author Kate Pickett was a member of the Commission's Expert Panel in an individual capacity.

Words are good but action would be better...

Bill Kerry — Fri, 18 Nov 2011 10:06:18 +0000

I've been reading the excellent monthly update on inequality matters from our friends at One Society and it is quite staggering just how many people are now speaking out about inequality and how the evidence mounts almost daily. So maybe we are in the run up to some action being taken but sometimes it feels like we've been running for a long time and the finishing line keeps moving away.

It is this frustration that surely lies behind the brilliant uprising that is the Occupy movement - a sense that action has to be taken and that people have had enough of words. As Kate Pickett wrote this week, the movement for greater equality needs the Occupiers to deliver the change the 99% of us wish to see.

But maybe I'm being too harsh. If you analyse the words closely the debate does seem to be moving more towards more specifics, more use of evidence and even policy proposals. I was particularly heartened to see the Archbishop of York focus on the under-valuing of the low paid which, of course, is the often neglected - but all too real - flipside of executive greed.

Not content with that he was back the following week citing David Cameron's initial welcome of a certain book you may have heard of. And Ed Miliband has again returned to the idea of democratising remuneration committees so that executives will, at least, have to look mere mortals in the eye before they make off with the loot.

To do some justice to the title of this blog I'll leave it there for now and take action instead to contact my local councillors about pay ratios. Please join me...

Photograph: canale666

Act Local = Reduce the Gap

Kathryn Busby — Wed, 16 Nov 2011 13:23:17 +0000

Last weekend, our annual conference for supporters and local groups (read the conference report here) saw the launch of a new campaign...

We are calling on local councils and councillors to play their part in tackling the UK's shocking pay inequality.

Last year, the British Social Attitudes Survey showed that a majority of people think the chief executive of a large company should be paid no more than six times the pay of a typical factory worker.

Yet evidence collated by One Society indicates that pay gaps are, on average, 15 to 1 in local authorities and a huge 262 to 1 in FTSE 100 companies.

Massive inequality of pay is built into the very foundations of our economy...

...but it doesn't have to be this way!

Local councils have the power to bring about change through their own pay policies and also, crucially, through their influence on private-sector contractors.

Please join our campaign, contact your councillors today and call on them to "act local and reduce the gap."

Inequality - setting up camp at the top of the news agenda

Bill Kerry — Thu, 03 Nov 2011 12:21:25 +0000

The precarious national, European and world financial situation - if rather nerve-wracking - continues to bring forth some long overdue clarity on how to address our collective problems.

At the beginning of the week we had the release of the insightful Plan B document from Compass and friends which is commendable for putting issues of equality and sustainability at the heart of economic thinking.

Then we had the pause for thought from the Church and then the Corporation of London about being beastly to the protesters at St Pauls. And now we have the Archbishop of Canterbury going further and getting into matters of policy by backing the call for a Robin Hood tax.

Heady days indeed. The absolute rightness of the protesters' case coupled with warnings about social disorder if economic failures are not addressed are clearly having some effect. Let's hope the message continues to percolate into the political mainstream and that we start to see all the parties acting in the interests of the 99% by promoting policies and action to reduce inequality.

But we are not resting and waiting for political action at the top. We will shortly be launching our new pay ratios campaign aimed at making the reduction in pay ratios across all sectors of the economy a widespread, popular and key approach to reducing inequality in the UK.

We hope you will join with us in this effort.

Photo credit: Garry Knight

49% - the astounding average pay rise for FTSE 100 bosses

Kathryn Busby — Fri, 28 Oct 2011 15:01:26 +0000

This morning we woke to the astounding news that executive directors in FTSE 100 companies have received an average pay increase of 49% this year.

Compare this with average private sector pay rises of 2.6% and public sector pay freezes - accompanied by inflation hitting 5.3%.

Political leaders including David Cameron, Nick Clegg and Ed Miliband have expressed concern about this extraordinary leap in pay for people at the top. As Left Foot Forward put it:

concerns about the inequity of pay deals are not just the concern of the protesters now occupying sites in 348 cities around the world.

It is time for action. The Equality Trust will shortly be launching a new campaign to help tackle excessive pay gaps - sign up to our email list here and find out how you can make your voice heard.

Find out more

One Society's Duncan Exley writes for Left Foot Forward - High Pay Damages Our Economy
One Society report - A Third of a Percent: the gulf between employees’ pay and chief executives’ pay, and the adverse impacts on UK plc
Top Pay in the UK - an event on 4th November chaired by Will Hutton at the London School of Economics and Political Science.
Resolution Foundation report published today - Painful separation: an international study of the weakening relationship between economic growth and the pay of ordinary workers
The divide between private and public sector pay awards continues - press release from Incomes Data Services.

TED Global: Richard Wilkinson explains how inequality harms society (video)

Kathryn Busby — Tue, 25 Oct 2011 12:13:38 +0000

Earlier this year Richard Wilkinson appeared in Edinburgh for TED Global 2011

In this fifteen minute video, you can watch Richard explain the damaging effects of an excessive gap between rich and poor.

Please share this film with your friends and contacts - and join the debate on TED Global's website.

Equality and transition - the road to sustainability

Kathryn Busby — Fri, 21 Oct 2011 12:26:11 +0000

We were pleased to be asked recently by the Transition Network for a contribution on the links, as we saw them, between greater equality and achieving long term economic, social and environmental sustainability.

Bill Kerry responded for the Trust.

His article makes the argument that greater equality is of central importance to the process of transition. Indeed, he argues, without achieving greater equality it is hard to see transition happening at all.

Read further evidence on the relationship between greater equality and sustainability.

For further information about the Transition Network, please visit their website.

Launching Inequality Watch, the new European network

Kathryn Busby — Tue, 18 Oct 2011 11:46:49 +0000

Anna Barford reports from the launch of Inequality Watch in Paris:

On 7th of October 2011, the member organisations of the European network Inequality Watch gathered in Paris for the official launch of the network - and in particular the new Inequality Watch website.

The website is designed to bring together the work of all member groups in a single online location. It showcases exciting new projects such as the world of the Spanish Observatorio de Desigualdades en la Salud who, with Hans Rosling and colleagues, have just launched a series of striking visualisations of health inequality in Spain.

Present at the launch, which was generously hosted by La Fondation pour le progrès de l'Homme, were the Italian, Hungarian, Portuguese, French and British groups. (Sadly the Spanish and Austrian groups could not come this time). I was there to represent The Equality Trust and to make a presentation about inequality in the UK.

The Equality Trust received a warm welcome and I was asked to give a detailed introduction to our work. It was a surprise to find that my talk was to be in French... but it seemed well-received by the mainly French audience that an English person was for once stumbling to find the correct word. Another surprise came when I noticed World Bank inequality expert Branko Milanovic, who happened to be in the audience!

To begin, Louis Maurin from the Observatoire des inégalités explained the original dream of creating a European network to provide people with the tools and information necessary to create a new kind of politics. He said that once they had come up with this idea, they felt compelled to do it. Wojtek Kalinowski of The Veblen Institute, who are provided funding for the network, offered encouraging words of support.

We were then treated to an introduction to inequality in richer countries by Michael Förster, who is in the Division of Social Policy at the OECD. He described the long, stable increase in inequalities across Europe, observing that in 1975 the UK had average inequality for Europe but by 1985 our inequality levels were higher than average - and they have stayed that way ever since. Sweden, despite being seen as very equal in Europe, also experienced a large increase in inequality levels between 1990 and 2010.

From the analysis of patterns in European inequality several political lessons were drawn (1) monetary and non-monetary transfers are important for reducing inequality, (2) high employment is not enough, we also need a political discourse that values greater equality and (3) education is the way to decrease inequality and increase employment.

Following this presentation, each member group of Inequality Watch presented inequality data from their home country. Here are some examples:

It was shown that in France in identical jobs, women earn 10% less than men.
In Italy there has been a reduction in educational inequalities at secondary school level based on parental occupation, but the University level remains unequal.
In Hungary inequalities increased during the period 1982-1995, as the country went through a transition to capitalism. More recently, 2005-2007, there has been a reduction in the GINI measure of inequality in Hungary, mainly thanks to redistribution.
In Portugal the high levels of inequality were traced to the education system and the forty year deficit in training due to the dictatorship. Now two thirds of Portuguese people have less than 9 years of education.

Some of these details can be viewed on the Inequality Watch website.

This was the first of many meetings, and I plan to continue to feedback details on the topics that are discussed and themes that arise.

For more on Inequality Watch, visit the new website or my earlier blog post.