32 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’). Today we are reviewing Social Justice, Equity and Income – and discussing what they mean 32 years later.

 

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. The economist, Thomas Pikkety, caused a notable stir with his work and research in 2014 when he suggested, in essence, capitalism does not work, and that the increasing gap between rich and poor threatens to destroy us.

 

So the question arises – in the 32 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 30 years, poor countries have been getting richer faster than people in rich countries have been getting richer. For instance, in the years 2007-2016, Uganda's economy is 107% larger by GDP; Italy’s is 22% 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 just over 800 million people are still living in extreme poverty of less than $2 a day (PPP) .

 

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 share of income for those in the bottom half of the U.S. population stagnated and declined during the years 1980 to 2014 from 20% in 1980 to 12% in 2014. By contrast, the top 1% share of income grew from 12% in 1980 to 20% in 2014. 

  • UK: The average income of the richest 10% is equal to more than the bottom 40% of salaries combined. 

 

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 30 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 10 years. Though it should be noted that the pay gap peaked in 2013, and has reverted back to 2008 levels in 2016. For instance in 2017 -

  • In low-income economies, the gap between male and female incomes is 68% (up from 62%            in 2006)

  • In middle-income countries it is 69% (up from 66%)

  • In high-income countries, it is over 74% (up from 69%) 

 

However, whilst encouraging, these figures 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  businesses making the global, national and workplace more equal

  2.  Some progress has been made towards equality over the past 31 years. Yet with income so     indelibly linked to health, education and survival is progress fast enough?

 

Sources and references

 

http://www.theguardian.com/money/2014/jun/16/british-public-wrong-rich-poor-tax-research

http://www.rationaloptimist.com/blog/inequality-is-falling,-globally.aspx

http://www3.weforum.org/docs/WEF_GGGR_2017.pdf

http://www.theguardian.com/commentisfree/2014/apr/12/capitalism-isnt-working-thomas-piketty

https://en.oxforddictionaries.com/definition/social_justice

https://en.oxforddictionaries.com/definition/equity

 

 

Note: This blog was originally posted on December 23rd 2014. The blog has been revisited to include more recent data.

 

 

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