In the UK inequality continues to rise. Income inequality in the United Kingdom is already worse than the EU average; recent data highlights that the UK’s GINI coefficient sits at 33.1. This data does not take into account the damaging impact that Brexit is already having. All other EU countries have a GINI coefficient between 23.2 and 40; the average sits at 31. As one of the wealthiest countries in the EU, it is shocking that the UK has not taken more action to counteract our high levels of income inequality.
Whilst it is easy to understand income inequality as statistical data, it is too simplistic to ignore the real effect such inequality has. On an individual level, its impact is staggering. This has a contagion effect throughout our communities, which has a serious impact across the country.
This also has significant repercussions to an individuals’ health. The Equality Trust has highlighted that those on low incomes in an unequal society are very likely to have issues with their physical health. This includes “an excess risk of premature mortality and poor self-rated health”. Additionally, they have a much higher likelihood of being obese.
When considering mental health in communities typically on lower incomes, the same organisation reports that “a much higher percentage of the population suffer from mental illnesses” compared to communities in which the majority of people are on middle or higher incomes. In particular they note “a higher prevalence of depression and increased risk of schizophrenia”.
Some question whether the relationship between health and income inequality is causal or merely coincidental. However, The Equality Trust also reports that if an individual moves from a more unequal country to a more equal country then there are typically marked improvements in their health. This highlights how significantly income inequality influences health. In the UK, the NHS is under severe strain; particularly in England and Wales. Whilst this is undoubtedly the result of chronic underfunding of the NHS, it is clear that some of the pressure on the service could be alleviated through reducing income inequality. Surely the UK government can recognise this link?
The impact on health is only the tip of the iceberg in terms of its impact. If a country has high economic inequality levels, it can also expect higher levels of violence and property crimes, as well as overall lower rates of trust amongst individuals, lower rates of participation in civic society and politics, and lower overall reported happiness of individuals. All of these indicators are very damaging to the functionality of our communities and the relationships we have with each other.
On a national level, higher income and economic inequality leads to lower scoring across the curriculum in education, as well as lower likelihood of social mobility. Further, the economy is more unstable and levels of debt, both public and personal, are higher. All of these national-level impacts reveal a clear pattern; societal progress and growth are significantly hindered by high levels of income and economic inequality across a country.
The best way to alleviate income inequality and develop better functioning societies is to provide the means through which financial security and the basic cost of income are both covered. The solution is a universal basic income. Both globalisation and automation may continue to worsen inequality; if a basic income guarantee is put in place, poverty can reduce the impact that a period of unemployment has on individuals.
Whilst some worry about the costs of rolling out a universal basic income, cost analyses indicate that this programme would cost less to administer than a traditional welfare programme and the cost of bureaucracy would also be significantly reduced.
Moreover, there remains a concern surrounding a downturn in productivity and growth as it is argued that people may be less motivated to work and earn an income. However, in his book “Utopia for Realists: and How We Can Get There”, the scholar and author Rutger Bregman explains that there would be little-to-no downturn in productivity and growth following the introduction of a basic income. I would highly recommend reading the book in order to get a fuller understanding of the case for a universal basic income.
It is clear that we are in an increasingly turbulent period; politically, economically and socially. A universal basic income could be a clear solution to many of the problems we face. As the unpredictability of the future of the UK continues, perhaps it is time this policy is implemented in order to ensure individual stability and security in well-functioning communities in our society.