“7 reasons we need a Sustainable Development Goal on reducing economic inequality
July 1, 2014 // By: Faiza Shaheen
This is the year the United Nations (UN) agrees on a new set of Sustainable Development Goals to lead the international development agenda until 2030. Today NEF publishes a report on why eliminating extreme economic inequality must be on the hit list.
1. We can’t end poverty without tackling inequality
Most of the world’s poor now live in middle-income countries, not low-income countries. They are struggling not because there isn’t enough in their economies to go around – but because wealth and resources are piling up in the hands of the rich.
2. Inequality wrecks the planet
In the face of climate change and dwindling natural resources, the chances of our planet sustaining indefinite economic growth are slim. But reducing inequality could go a long way to eradicating poverty even in a low growth scenario. Forecasts show that – even if the world economy slows down – a more equal world in 2030 would have half the number of people living in extreme poverty.
Inequality also does untold environmental damage of its own – by driving a consume-to-catch-up culture, as people struggle to emulate the cars, holidays, houses and fashion of those further up the chain.
3. Meeting basic needs is not enough
There is a big misconception that inequality will be solved as a by-product of other measures, such as universal healthcare and education. But while these measures are vital for progress on human rights they are no guarantee of a more equal society. Studies have again and again shown that high income and wealth inequality is strongly related to lower levels of social mobility. The UK is a case in point – even though we have universal education and healthcare many of our poorest are trapped in cycles of deprivation that last generations.
4. Economic inequality worsens social exclusion
The proposed SDGs rightly have a strong focus on reducing disparities along gender, ethnic and religious lines. But even with less discrimination disadvantaged groups will not attain parity without addressing grossly unequal starting points. High levels of economic inequality mean that anyone with even a small initial disadvantage are unlikely to fulfil their potential.
5. Inequality is a slippery slope
Political inequality is a direct descendent of economic inequality and it is incredibly hard to reverse. As soon as one echelon of society can pay for the best childcare, the top schools, the best doctors, lawyers and bank managers it is not long before all positions of power are theirs too (or their children’s). And why would they want to change a system that is rigged in the favour of them?
6. It is measurable
One of the main arguments against including economic inequality in the SDG shortlist is that it cannot be robustly measured. But this is a poor excuse. Our paper explores a range of potential options and settles on the Palma ratio, an indicator that weighs up the ratio of income going to the poorest 40% compared to the ten per cent. This could be complimented with other easily-communicated measures such as changes in real median incomes and the share of wealth going to the top 1%.
7. We need a transformative SDG
Sustainable Development will never be achieved by tinkering around the edges of a fundamentally flawed economy. While other proposed goals on basic water, education, healthcare and sanitation are crucial for progress on human rights, an SDG on eliminating economic inequality would force governments to address the root causes of our problems.”
(Quelle: New Economic Foundation)