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The Inequality Scandal: A Source of Collective Shame and Anxiety

Wednesday, October 27, 2010 - 10:28
South Africa needs to increase debates on what needs to be done to address the increasing levels of poverty and inequality. Addressing poverty and inequality is the responsibility of all stakeholders. Inequality affects people in both the top and bottom income brackets. However, the rich needs to be made aware of the effects of inequality in our society and should be inspired to make a difference in addressing other related socio-economic challenges faced by poor communities. Inequality comes in many forms and should not be confused with poverty

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It’s no wonder so many people suffer from anxiety these days… as the gap between the rich and the poor turns into an abyss, too many people feel hopeless and lacking any real direction in life. Oh the humanity, will social equity ever be more than wishful thinking?
Buffalo City (East London), Johannesburg and Ekurhuleni (East Rand) are the most unequal cities in the world, based on data gathered in a UN-Habitat survey of 109 countries from all regions of the world. These cities had income-based Gini coefficients of 0.71 or more. The Gini index is a widely used measure for the distribution of household income or consumption spending in a country. A zero value implies perfect equality with resources distributed proportionally amongst all households, while 1 signifies perfect inequality, where one household has all of the area’s income and no one else has any. In other words, the lower the Gini coefficient is, the more equal the society.

The most egalitarian cities in the world are located in Western Europe with cities in Denmark, Finland, the Netherlands and Slovenia having Gini coefficients below 0.25. Beijing, the capital of China, is the most equal city in the world with a Gini coefficient of 0.22. The international alert line, above which cities and countries need to start being concerned, is a Gini coefficient of 0.4.

We should be ashamed. There should be outcry at such scandalous statistics. But what publicity does this information get in East London? A small article printed in the local GO-express community newspaper. There was no debate about what needs to be done.

Inequality must not be confused with poverty. There are two measures for poverty: absolute poverty that measures how poor someone is measured against a benchmark, like a dollar a day; and then there is relative poverty that compares how poor someone is relative to someone else or another group. Inequality is similar to relative poverty in that it measures differences in wealth between people or groups.

Inequality comes in many forms, from economic inequality (that compares the income of those that have money or wealth with those that don’t) to consumption inequality (that compares those that spend lots on money on consumption expenditure with those that don’t), land inequality (comparing those that have with those that don’t have land), services inequality (comparing those with access to water and sanitation services, etc. with those that don’t) to even inequality in power distribution (comparing those that have access to political power with those that don’t).

It is an obvious statement, but it needs to be made: income or wealth inequality has two sides to it, those in the top income bracket and those in the bottom income bracket. When most people discuss and try to find solutions to inequality, they focus on the bottom aspect of inequality - the poor. Very few look at the top - the rich.

Most people this writer has spoken to feel that poverty is the main issue that needs to be addressed and that inequality is just a by-product or outcome of poverty. But the reality is that inequality affects us all. Addressing inequality is not just about improving the lives of those at the bottom. It is about addressing wealth distribution from the poor to the rich.

Wilkinson and Pickard (2009), in their book ‘The Spirit Level: Why More Equal Societies Almost Always Do Better’, have drawn some interesting conclusions in relation to the effect of inequality on society. They report that across whole populations, meaning populations of countries and regions that include both rich and poor, in more equal societies, compared to inequitable societies:
  • People live longer, a smaller proportion of children die in infancy and self-rated health is better;
  • People are far less likely to experience mental illness;
  • People are less likely to use illegal drugs;
  • Children do better at school;
  • A lower proportion of the population is imprisoned;
  • Obesity is less common;
  • There is more social mobility. People may move up or down the social ladder within their lifetime or from one generation to the next;
  • Communities are more cohesive and people trust each other more;
  • Homicide rates are lower and children experience less violence;
  • Teenage motherhood is less common;
  • The United Nations Children's Fund (UNICEF) measures of child well-being are better.
Quite clearly, societies that have more equality accrue a horde of benefits to their residents. It needs to be repeated that we are not just talking about the lives of those at the bottom of the income ladder, we are talking about the society as a whole - rich and poor. So, it is in everyone’s interest - rich and poor - to live in a more equitable society. I know, as a middle income white male, that I don’t want to live in a society where I and my family are more susceptible to living a shorter life span, doing less well in school, being more obese and having less trust in each other. The rich therefore do not only have a moral duty to be concerned about inequity in the sense of addressing the needs of the poor, it is also in their own interest to foster conditions for a more equitable society.

Space prevents me from going into detail about what can and needs to be done to address inequality. I will just make two suggestions.

The first is that all people, rich and poor, but especially the rich, need to be made aware of the effects of inequality on society at large. Small activities can make a big difference, like organising study visits for the rich living in suburbs to our townships, informal settlements, and rural areas to see for themselves the gap that exists; or forming twinning arrangements between rich schools and poor schools, so the grown-ups of tomorrow can start to appreciate the need to work on inequality now.

The other suggestion is that debates about what needs to be done to address inequality needs to be significantly increased. All stakeholders from municipalities, government departments, civil society organisations, academia to the media can play a role in this regard. Focused debates must be initiated to ensure that we devise ways and means of combating the worsening levels of inequality - even if for purely self-serving reasons on the part of the well-off.

- Ronald Eglin is senior projects coordinator at Afesis-corplan, a NGO contributing to community-driven development and good local governance in the Border-Kei in the Eastern Cape. This article first appeared in the
August/September 2010 edition of Transformer. It is republished here with the permission of Afesis-corplan.

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