What is the correlation between income and health? I would guess that those on lower incomes are less healthy, and that they might also score worse on related attributes of life expectancy, addictions, literacy, and criminal or domestic violence.
And this is, in fact, what the data shows.
But now an intriguing study suggests that many measures of social health also worsen with increased income disparity.
Income Gap is the ratio of the average income of the richest 20% to that of the poorest 20%: it’s value is 5 in the Netherlands, 7 in the UK, and 10 in the US.
The study argues that this multiplier directly correlates, and potentially causes, all sorts of social ills.
Wilkinson and Pickett, The Spirit Level: Why more equal societies almost always do better
The Spirit Level’s argument is controversial, of course. If true, it completely undermines the conservative position that rising income inequality elevates society as a whole by empowering the winners to spend, create new businesses, and pay the majority of taxes. BBC4 had a good pro-con debate on Analysis, and the Right has predictably weighed in to say that the facts don’t speak for themselves, the evidence is incomplete: tactics used to hopelessly muddy the climate debate.
The Spirit Level is not perfect: I particularly struggled with this graph of Income Inequality and Social Mobility.
The data is sparse and the line is created by two outliers: the US and UK – I doubt that this graph proves anything. More disturbing is the characterization of the US as dead-low in Social Mobility: our “classless” society where merit determines earnings determines social rank should be more mobile, not less.
This drove me back to the literature – “Social Mobility” is, not surprisingly, a slippery concept. It can be based on at least four definitions: Inter-generational and Intra-generational, each in Social and Economic dimensions. Is your income highly correlated with your parent’s income? Yes: and in that way, the US has low social mobility. Is your income highly correlated with your own educational achievement? Yes: and in that way, the US has high social mobility.
The truth depends on the myths we tell ourselves about our society and the often differing ways that we choose our definitions in different cultures. While this is an issue in making the global comparisons, I don’t think that it obscures the central truth of the Spirit Level’s argument: greater income inequality is bad for society.