Inequality in wealth is not the only inequality. Opportunity, education, political involvement and awareness, health and life expectancy are all changing. The economist also argues for sticks as well as carrots in Welfare Programme – Spilling over, 9th May 2019:
Talking about penalties (school exclusion and removal of benefits) for a child not being vaccinated “The papers find that such penalties have wide-ranging effects. They encourage compliance not only by the family that is directly affected, but also by their neighbours, and by the families of classmates and siblings’ classmates.”……
The UK needs to “change the rules” to avoid the damaging extremes of inequality seen in the US, according to Angus Deaton, the Nobel prize-winning economist. Britain has not yet experienced anything like the wage stagnation and rising mortality seen among less educated Americans, but on recent evidence, it risks following the US example, Sir Angus will say at Tuesday’s launch of a review that aims to identify the forces driving UK inequality and propose solutions. The five year exercise, led by Sir Angus and initiated by the Institute for Fiscal Studies, a think-tank, is one of the most ambitious attempts yet to understand and address the economic disparities that are often blamed for the surge in populism and decline of mainstream political parties across the developed world. It comes amid a ferment of intellectual activity in both the UK and US, with new think tanks on the left advocating radical remedies to capitalism’s perceived shortcomings, ranging from a universal basic income to a four day working week. Politicians across the political spectrum have been searching for a response to the sense that the UK’s economic and social structures do not give all of its citizens a fair chance. The IFS review, funded by the Nuffield Foundation, a charitable trust, will harness academic heavyweights from several disciplines, with a panel including experts in sociology, demography and philosophy, as well as the World Bank’s chief economist Pinelopi Goldberg and the Nobel-winning economist Jean Tirole. Paul Johnson, IFS director, said the first goal was to understand the interaction between different forms of inequality — of income, work, health or family structures; and between generations, genders or regions — and identify those that matter most.
A report by the IFS, to be published on Tuesday at the review’s launch, noted that while UK income inequality had been stable, this was largely because tax credits had offset worsening earnings inequality. “Benefit income received from the government may feel quite different, in terms of the dignity and security it brings, from income earning in the labour market,” said the report. But inequality “is not just about money”, added the report. Among other examples, it called attention to a rise in the UK of middle aged “deaths of despair”, from suicide, drug overdose or alcohol-related disease.
The IFS report also noted diverging family structures: high earners have become more likely to live with a partner, while those on low wages have become more likely to live alone. As well as mapping out changing patterns of inequality, the IFS review will draw on international experience to examine the underlying causes. It will look at frequent scapegoats, such as technological change and globalisation, but also at the decline of trade union membership and the widening gap between the most successful companies and the rest, which could point to failures in competition policy. The aim is to design an overarching response — ranging from changes in taxes and benefits to reforms of labour markets, education, competition policy and ownership structures — so that measures complement each other.
“If working people are losing out because corporate governance is set up to favour shareholders over workers, or because the decline in unions has favoured capital over labour . . . we need to change the rules,” Sir Angus will say.