Why inequality matters

Economics, Food & livelihoods, Food security, Gender, Governance, Rights

Inequality impacts on the welfare of us all. It affects everything, including social cohesion, the economy, politics, gender relations, environmental concerns and sustainability. NGOs ignore inequality at their peril, thankfully Oxfam has plenty to say about it.

The incomes of the world’s richest 1% have increased by 60% in twenty years and the World Economic Forum Global Risk Report 2013, names severe income disparity and chronic fiscal imbalances as the two global risks most likely to manifest themselves in the next decade. In addition, inequality between the position of men and women across the world means that women are disproportionately affected by poverty and inequality. On average women earn 23% less
than men
 and occupy only 40% of paid jobs outside of the agricultural sector, even though women in Africa and Asia work up to 13 hours a week more than men.

Collectively as Oxfam, we have decided that challenging inequality is at the core of our purpose.

In this context the Oxfam confederation of 17 global affiliates has just launched a new visionary strategic plan (publishing soon). ‘People claiming their right to a better life’ is Goal One. This encompasses much more than overcoming poverty – it’s about empowering individuals to break through social barriers and challenge injustice and inequality. The second goal focuses on gender justice, empowering women to claim and advance their rights, and tackling violence against women. Other goals are about: a fair food system, fair sharing of natural resources and universal
access to essential services. 

Collectively as Oxfam, we have decided that challenging inequality is at the core of our purpose.

Inequality: not just injust, it’s also inefficient!

In The Cost of Inequality we argue that inequality is economically inefficient, politically corrosive and socially divisive. If assets are concentrated in the hands of the few, fewer goods are purchased and economic growth is stifled. This means fewer jobs and more people overall living in poverty. Rich elites can also have unhealthy levels of influence in politics, either through financial support for party politics, or illegitimately through
bribes. This can result in policies which benefit the few rather than the many, a common trend in developing countries with weak governance.

In the 2008 book, The Spirit Level, researchers compared the world’s richest nations, and found strong evidence for the connection between high levels of inequality and poor health, obesity, lack of community cohesion and disparity in educational performance. They also found a correlation between inequality and other social problems such as drug use, teenage pregnancy and crime. The authors argue convincingly that inequality in society has a negative impact on individuals from
all backgrounds. Citizens in countries with less inequality, like Japan and Sweden, are less vulnerable to these problems.

Inequality is growing in higher middle income countries even whilst it is decreasing in some poorer countries. Our BRICs Inequalities Factsheet lays out the situation in Brazil, India, China and South Africa. In these countries inequality is connected to growth in the informal jobs sector where workers have few rights. Growth in urban areas is also leaving rural dwellers at a disadvantage. Half the population of China lives in rural areas, where they are excluded from
public benefits like medical insurance and improved access to education.

Across the BRICs, regressive taxation systems (dependent on consumption rather than income) and subscription based social security schemes mean that the poorest pay a much greater proportion of their income in tax compared to the richest. Even worse, the poorest people often lack security nets, such as health insurance, because they can’t afford the subscription costs even for government schemes.

Equal access to natural resources

Doughnut representation of social and planetary boundariesOxfam feels that we cannot tackle inequality without also addressing sustainability. And this needs to be done as a matter of urgency. Crudely put: how can we help the world’s poorest to access their fair share of the world’s resources before the wealthiest use them all up? And how can we remodel what a ‘developed’ nation looks like, so that it is economically
and  environmentally sustainable? Our discussion paper A Safe and Just Space for Humanity identifies eleven essential human needs and positions them against a ceiling of nine planetary boundaries. Worryingly, three of these boundaries – biodiversity loss, climate change, and nitrogen and phosphorous cycles – have already been breached.

We don’t have the perfect answer to inequality, but the following measures would be a good start for any country where inequality is an issue:  raising minimum wage standards; increasing funding for education and healthcare; ensuring provision of universal social security; reducing taxes paid by lower income citizens, and optimising tax revenue from business and wealthier citizens.

Oxfam aims to empower people to tackle many of the above through our advocacy, campaigns, and active citizenship work. In addition our global campaign, GROW, has inequality firmly at its centre. The campaign aims to build a just food system for all, addressing injustice in the impact of climate change, land grabs and food price spikes on poor communities, and helping small scale farmers to counterbalance inequalities. And of course, poor and marginalised women are at the heart of the campaign.

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Author: Catherine Meredith
Archive blog. Originally posted on Oxfam Policy & Practice.