Inequality: a global challenge

I’ve been working on the issue of economic inequality for many years, but until now my research has focused on the UK and other high-income countries. This is why I was asked to contribute to a Channel 4 programme How rich are you? on inequality in the UK tonight.

In my new position as Head of Inequality at Save the Children, I’ll be extending my analysis to consider growing inequality in middle and low-income countries. More than 70% of the global population lives in a country where the gap between rich and poor is widening. Inequality is a truly global challenge; we need global solutions.

Children by their makeshift home under the Nehru Place metro station in New Delhi
(photo: Prasanth Vishwanathan/Save the Children)

The list of negative outcomes associated with high levels of economic inequality is growing but already includes lower social mobility, less trust, higher levels of violent crime and conflict, greater fear of crime, more stress and mental health problems, lower levels of well-being, higher levels of debt, economic instability, falling voter participation among the poor and even climate change. These negative outcomes are occurring, to different degrees, in all countries where inequality is growing. One visual sign of growing inequalities are gated communities – common in South Africa, and now a growing phenomenon in the UK.

Enough to go round

There’s another reason why inequality matters in low and middle-income countries. Evidence shows getting to zero on extreme poverty will take far longer without addressing economic inequality. This is especially the case now because most of the world’s poor live in middle-income countries, where there may be enough money and resources to go around but they are often concentrated in the hands of a few.

Where inequality is relatively high, such as in Mexico, the fight to end absolute poverty is stalling. One leading leading development economist calculated that a 1% increase in income cut poverty by 0.6% in the most unequal countries but by 4.3% in the most equal countries. The lower level of poverty reduction in more unequal countries is no surprise – studies show more unequal societies spend less on public goods like health, education and transport.

A fair chance for every child

Our work at Save the Children highlights how far growing economic inequality is manifesting in other types of inequalities – including child mortality and educational outcomes. Simply put, growing economic divides are making it increasingly difficult to give every child a fair chance. While we’re not saying there should be a goal of absolute equality, lower levels of inequality are certainly required for human progress.

Along with many other civil society groups, we’re pushing for equality to be built in to the foundation of the new Sustainable Development Goals (SDGs), which will replace the Millennium Development Goals in 2016. This includes measures to ensure that marginalised groups such as women, ethnic and religious minorities and disabled people are prioritised, as well as a target to reduce overall income inequalities.

Crucially, the SDGs will be universal – applicable to the global North and South. That means every country will be expected to give inequality the attention it deserves.

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  • Simon Wright

    Great TV programme, Faiza. I just watched it on 4OD. You came across really well and the programme was a great example of how to make complex economics accessible.