In national studies of inequality, attention is often given to the interplay between economic inequality and inequalities of gender and ethnicity (as well as other social divisions such as age and sexuality, for example). In the case of ethnicity a key generalization is drawn from the massive gap that opened up between the early industrializing nations and the rest of the world, noting that the gainers were European countries plus a number of nations with strong connections to Europe – the US and those countries of the British Empire where large-scale colonization from the UK took place. The impact of imperialism on structuring contemporary divisions of ethnicity is an important factor in explaining the significant and sustained economic disadvantage of the countries excluded from this process in the eighteenth and nineteenth centuries. Echoes are also present in the emergence and operation of institutional racism experienced by minority ethnic populations in advanced economies such as the UK (EHRC, 2016), as well as in the policy discourse on migration which is driven by economic rather than humanitarian concerns (see Chapter 6).
In the case of gender, the fundamental fact is marked inequalities between men and women across the world in all dimensions of life, including income and wealth. Since the groundbreaking Fourth UN Conference on Women held in Beijing in 1995 (United Nations, 1995), discussion of women’s poverty has wrestled with methodological problems about measuring income and wealth and the disaggregation of more widely available household data to account for gender distributions within households. UN Women, the UN agency established to promote gender equality, highlights more revealing inequalities in access to economic resources that ‘keep women poor’. This includes less access to credit than men, restricted rights to hold land and more limited rights to social protection. This last form of inequality has been the subject of important social security and workplace reforms since the 1970s in advanced economies, but globally, although over the half of the world’s women are in waged employment, the gender gap in employment participation has hardly changed since 1995. Women continue to be more likely to be unemployed, more likely to be in vulnerable employment and consequently are overrepresented among those who lack pension and other social protection entitlements (ILO, 2016). Progress in reducing economic gender inequality has, in fact, stalled since the 2008 financial crisis (World Economic Forum, 2018), and in the intersection with race and ethnicity divisions have also been deepened through austerity measures (Bassel and Emejulu, 2018). There are, in addition, other dimensions of inequality that are often blurred or omitted in public debate, such as the notion of inequality of opportunity and inequalities between generations, but which are also central to policy outcomes. The next section will consider these issues sequentially, while acknowledging connections between them and the broader agenda about inequality.
Persistence and change in inequality
As far as inequality of opportunity is concerned, the fundamental question of whether and to what extent some degree of inequality is acceptable and/or justifiable is of more than philosophical interest in the social policy context. Inasmuch as there is widespread acceptance of the case against extreme inequality, this is often supplemented by a concern about inequality of opportunity. The position that tends to capture general agreement is that while some inequality of outcome as a consequence of differences in individual endeavour is tolerable, it is desirable that individuals start life equal. Nevertheless, even were this to be a generally agreed principle, there is substantial evidence that this ideal is not realized in practice. Piketty’s (2014) examination of the distribution of capital explores the importance of its transmission between generations. Studies in the US and the UK have provided extensive evidence that individual life chances are affected by parental wealth. A particular UK contribution to this has been cohort studies following people from birth (Pearson, 2015). It has been shown that upward social mobility is heavily dependent upon increases in job opportunities (Goldthorpe, 2013), although even where occupational mobility is possible it is argued that a ‘class ceiling’ linked to ‘cultural capital’ continues to operate (Friedman and Laurison, 2018). Deindustrialization, the automation and precarity of much work and the effects of the 2008 crisis on incomes, savings and debt have led to a considerable deterioration in the generation of new opportunities. Upward mobility is thus only feasible if there is equivalent downward mobility, which is limited given that family advantages among the better off are generally preserved.
The implications for social policy are that the most commonly accepted social mobility policy – increasing educational opportunity – only works at the margins and mostly simply increases the effort needed to reach the same point as one’s predecessors. More radical options then require a focus on limiting privileges. Here again, while educational privileges offer obvious targets, to go further implies the reduction of economic advantage. With respect to relationships between the generations, the taxation of the transfer of wealth such as inheritance tax is practised to a modest degree in various countries in the world. Scheve and Stasavage, in Taxing the Rich (2016), show that high rates of inheritance tax, like high rates of income tax on high incomes, were only developed across the period of very high state expenditure occasioned by war in the twentieth century. Since then there have been reductions in inheritance tax, including its abolition in Australia, New Zealand, Austria and (more surprisingly given its Gini coefficient) Sweden.
The discussion in this chapter has considered data on the distribution of both income (measured in terms of money accrued in a specific period) and wealth (measured in terms of the longer-run holding of assets). Clearly in any consideration of inherited advantage the latter is important. Perhaps the most important contribution of Piketty’s (2014) path-breaking study of inequality is that he shows that in the countries he studied – France, the UK and the US – in the nineteenth century there was a steady increase in inequality seen in terms of variations in the holding of wealth. The wars of the twentieth century, and some of the policies that followed after them (particularly immediately after 1945), led to some equalization. Then, as noted earlier with respect to income inequality, the last years of the twentieth century and all of the twenty-first (so far) saw a reversal of that equalization, and the contemporary economic climate is a period in which wealth inequalities are particularly likely to grow.
While the general implications of Piketty’s analysis are evident, it is useful to draw attention to an aspect of the growth of wealth with specific social policy implications. While the increasing wealth of the super-rich is most significant (the top 1 per cent or 0.1 per cent, for example), there has been some spread of wealth among a much larger number of the better off, taking the form of wealth invested in housing. Lowe (2011, p. 238) sees here a clear
stratification effect … a major intergenerational rift in most of the home owning nations. House price increases, the famine of mortgages arising from the credit crunch and the differential layering in of housing wealth have all impacted to create disparities and fractures in the housing landscape with major long-term impact.
The implication is that a ‘property owning democracy’ is also likely to be an inequality perpetuating society. Lowe’s analysis is particularly applicable to countries such as the UK and the US where home ownership is the dominant model, but is also increasingly relevant for countries such as Denmark where the ‘social ownership’ model is under threat. Ultimately an underlying policy problematic has been greatly intensified by the financialization of property accumulation through mortgages, which sets the benefits of housing asset ownership for those on the lowest incomes against the power of financial elites to maintain their position (see Chapter 8). The development has implications not just for social mobility but also for the other two topics to be discussed in this section.
The two issues – inequality between young and old and inequality between the generations – are linked in that a realistic analysis of the former requires a recognition of the significance of changes over time. In the nineteenth-century studies of poverty in the UK carried out by Seebohm Rowntree, much was made of a life cycle effect. Working-class adults able to participate
