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28 years on - is the world a more just and equal place?

In 1986, stakeholders from around the world came together in Ottawa, Canada, for the First International Conference on Health Promotion. Emerging from this conference was a charter for action to achieve Health for All, which identified eight fundamental conditions and resources for health (the ‘prerequisites for health’). This month we are reviewing these eight prerequisites – and discussing what they mean 28 years later. Today we consider Social Justice, Equity and Income

The term social justice relates to the fair distribution of ‘wealth, opportunities and privileges’ across society. Equity, is the quality of being fair and impartial. Earlier this year the economist, Thomas Pikkety, caused a notable stir with his work and research, which in essence, suggest capitalism does not work, and that the increasing gap between rich and poor threatens to destroy us.

So the question arises – in the 28 years since the Ottawa Principles were established - is the world a more just and equal place? 

Measuring social justice and equity is highly complicated, however one simple metric is income… 

1. Global income equality?

For some, this might seem surprising, but global inequality is reducing. Specifically, over the past 25 years, poor countries have been getting richer faster than people in rich countries have been getting richer. For instance, in the past 5 years Mozambique’s economy is 60% larger than it was in 2007; Italy’s is 6% smaller. Therefore whilst high profile statistics may point out increases in wealth inequality or pre-tax income inequality. These are caused by the rich getting disproportionately richer, not by the poor getting poorer, with inequalities in luxuries, not in necessities.

Yet, whilst it is should be celebrated that the percentage of the world’s population living on $2 a day has halved since 1990 (ahead of the Millennium Development Goal target), this should not hide the fact that 1.2 billion people are still living in extreme poverty.

2. National income equality? The question then arises, if wealth between countries is becoming more equitable – is income distribution within countries more equitable? For instance a 2011, UNICEF study found that globally, the top 20 percent of the population enjoys over 70 percent of income, this includes…

  •    China: Over the past two decades China’s Gini coefficient (a widely used indicator of economic inequality) has risen from 0.45 to 0.73. Reflecting a situation in which a third of the country’s wealth is concentrated in the hands of 1% of its citizens, whilst the poorest quarter of Chinese citizens own just 1% of the country’s wealth.
  •    US: The richest 1% of the population controls about 40% of the country’s wealth, and the Gini coefficient in the USA has risen from 1.3 (1985) to 1.9 (2008) -
  •    UK: The average income of the richest 10% is almost twelve times that of the bottom 10% of the population by 2008, up from eight times in 1985.

However, whilst top salaries in the UK (and other developed economies) may have rocketed - these headline numbers hide a far more complex picture. Once you take into account tax and benefits, the Gini coefficient of inequality in the UK is actually lower now than it was 25 years ago. Specifically, whilst the highest-earning 20% of British households earned 14 times as much as the lowest earning 20% - after tax and benefits this decreases to 4 times

3. Personal income equity (gender) 

Finally, what about personal income equality. On the WEF’s Global Gender Gap Index, the pattern is clear, economic development leads to improved gender income equality, further these gaps have closed over the past 5 years. For instance in 2014 - 

  •    In low income economies the gap between male and female incomes is 67% (up from 62% in 2006)
  •    In middle income countries it is 68% (up from 66%)
  •    In high income countries it is over 70% (up from 69%) 

However whilst encouraging these figure do not hide the fact women tend to be in lower-level positions within the workplace, and perhaps even more alarmingly significant pay gaps continue for men and women doing the same role. 

To summarise, whilst income is not the only (and many would argue not the best) indicator for equality what is clear is

  1.   Simple headline numbers make the picture too simple, and hide the integral role of government and business’s making the global, national and workplace more equal
  2.   Some progress has been made towards equality over the past 28 years. Yet with income so indelibly linked to health, education and survival is progress fast enough?

Sources and references,-globally.aspx

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