Can we ever be equal?

English: Differences in national income equali...

English: Differences in national income equality around the world as measured by the national Gini coefficient. The Gini coefficient is a number between 0 and 1, where 0 corresponds with perfect equality (where everyone has the same income) and 1 corresponds with perfect inequality (where one person has all the income, and everyone else has zero income). (Photo credit: Wikipedia)

by Paige Shaw

An unequal society where the upper class holds more of the country’s wealth is considered unfair. In countries such as the United States, the wealthy hold approximately eighty percent of the country’s wealth, and not enough the wealth being taxed from the rich is transferred to the poor. In countries such as Sweden and Denmark, although the distribution of wealth is more equal compared to the U.S., the wealthy still hold a greater percentage of the countries wealth.

Is this still unfair? Objectively, since not all of the classes are equal, it is still unfair. However, I would argue that having a slight inequality between the classes keeps people motivated and is overall better for the economy. People should receive equal opportunities and that everyone should be equal to an extent, but complete equality seems unfeasible.

From a fairly young age we are taught by our parents and in school that everyone is their own individual, and everyone has something about them that makes them unique. Gender, race, and other things aside, you are still different than the person next to you because there is only one of you. So if everyone is different, doesn’t that make it difficult to create a society where everyone is equal?

In his article “Is equality feasible?” Lane Kenworthy mentions that peoples earnings are determined qualities such as intelligence, creativity, confidence, inherited wealth, physical and social skills, and motivation. Most, if not all, are products of genetics, parents’ assets, and traits. We are all inherently different, and we all have our own strengths and weakness, which can make us more capable at performing certain tasks than others. In an equal society where everyone gets paid the same, if one person is a harder worker and better at a certain job than the person beside them, but they are still getting paid the same, it could make them feel less motivated to do their job. Of course there are certain cases that if you loved your job that it wouldn’t matter how much you get paid as long as you could keep doing what you are doing, but the slight inequality between workers keeps people motivated and increases their work effort.

Inequalities are what makes business competitive and drives the economy. And although a completely equal society is an appealing idea, it is not sustainable. In order to pay equally high wages businesses would have to charge their customers more. But in a competitive market, customers will generally refuse to pay more for a good or service when they can get it more cheaply somewhere else. The firm then loses business and has to start letting workers go. Therefore unless wages are lower, which implies some inequality, jobs will not exist.

However it is hard to say whether or not a completely equal society could be good or bad for the economy. It is my general opinion that we need to have that little bit of inequality in order to keep people and markets competitive to drive the economy. It can also be argued that income inequality could decrease consumer demand, and the middle/lower classes may regard high inequality as excessively unfair, causing a decrease in employment motivation and work cooperation.

Complete equality may not be sustainable but too much inequality could also prove to be unsustainable as well. Countries like Sweden and Denmark set a good example of a good balance between equality and inequality. There is still an upper class but more of the countries wealth is transferred to the poor. If more countries adapted a similar system it could prove to be more sustainable.

Reference

Kenworthy, Lane. 2007. “Is Equality Feasible?” Contexts 6(3):28-32.

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Social Equality and the Idol of Growth

by Marcel Koníček

I come from the Czech Republic, a country with one of the most equal distributions of wealth in the world. However, even the Czech Republic has recently felt the change in the policies of employment in many parts of the economy that are supposed to raise the competitiveness of the economy on the global markets but which also rob the employees of much of their job security. This change became very tangible after the crash of the US banks in 2008, which started the tsunami of economic crisis that sent all European economies into disarray. Suddenly, the broad group of debt-ridden people whose employment depended on the short-term needs of their employers, beingsuddenly shifted from permanent employment into agency work and short term contracts, living from payday to payday, appeared and it has not disappeared ever since.

This is not a local phenomenon. The changes in the Czech Republic coincide with the systematic worldwide shift that Standing describes in his book The Precariat. In the book he is describing the social group of the same name (which is an allusion to the proletariat), a very broad group of people that are living in constant uncertainty. The growth of this social group is mainly caused by the globalisation of the world economy and the effort of the corporations to cut their costs and keep them competitive with the newly rising economies in Asia (Standing 2011:40-50).

It is possible to assume that being part of the precariat is not something that most people would like to experience. Losing your job security is certainly not a good thing. Still, it is not only the companies that are making this change happen. More and more, it is the policy makers of the countries who contribute to the raising social inequality and job insecurity. They argument with neo-liberal ideas of equality being stifling for the economic growth and job security being a barricade for creating new jobs. They speak about economic growth and statistic measures such as GDP as if it was some kind of pagan idol, a cure-all for all the ailments of the human race. That the only thing that is important in the end is the bottom line.

However, things such as job security and social equality have many merits that are hard to evaluate by simple economic statistics. If somebody does not have to be afraid about the future of his job, he is probably less likely to try abuse the social system. If he lives in a more equal society, it is less likely for him to search for easy-sounding but radical political solutions. In this context, the neo-liberal laissez-faire policies look more like a trade-off that might be or might not be worth it. However, this is only true if their initial assertions are true. Is economic equality really slowing down the economic growth?

According to Lane Kenworthy this might not be so. In his study he is comparing economic equality and growth in many developed countries. He finds that:

“Affluent countries with egalitarian institutions and policies have so far been fairly successful at maintaining relatively high levels of income equality. And that success does not appear to have come at the expense of income growth for the middle class or the poor. There may be a trade-off between earnings equality and job growth, but its magnitude appears to bemodest.” (Kenworthy 2011:32)

If that is so, should the politicians be trying to reverse this shift towards inequality and job insecurity? I believe so. Sadly, it seems that both politicians and businessmen perceive growth and spending cuts as some kind of idol that has to be worshiped despite the consequences. This is in my eyes not a healthy sustainable attitude.