From the TUC

Building a more equal society: the role of economic democracy

08 Sep 2009, by in Economics

Kate Pickett will be speaking at the TUC Congress fringe meeting “Building a more equal society: the role of economic democracy” on Mon 14 Sep 12:45-14:00

Despite the dominant trends in politics and economics over the last thirty years a consistent and large majority of the population still believe that the UK should be more equal. In July 2007 the Joseph Rowntree Foundation reported in its survey “Public Attitudes to Economic Inequality” that:

“Over the last 20 years, a large and enduring majority of people (73% in 2004) have considered the gap between high and low incomes too large” …  “People do not necessarily think that those on low incomes are underpaid, but that those on higher incomes are very overpaid”.

We now have new and compelling evidence to bolster this widespread and intuitive view that great inequality is damaging to a society.

In our recent book The Spirit Level: why more equal societies almost always do better Richard Wilkinson and I collected and analysed data from twenty-three of the most developed countries in the world. We show that a wide range of health, social and environmental indicators are strongly affected by the level of income inequality that exists in a society. To double-check these findings we also ran the same analyses for the fifty U.S. states and the results were strikingly similar.

If the UK were to shift from being one of the most unequal societies in the developed world (as it is now) to being one of the most equal then, for example, rates of mental illness would be five times lower, rates of imprisonment also five times better and rates of obesity six times better. The evidence also shows that major improvements would be made in levels of trust, participation in community life, educational performance, physical health, life expectancy, teenage births, levels of violence and social mobility – as well as creating the necessary conditions to tackle environmental issues.

In addition to setting out this evidence in our book, we set up The Equality Trust to promote the evidence and campaign to halve the UK’s level of inequality. The Trust particularly supports the idea of economic democracy whereby companies and other institutions that comprise our economy, including public and community services, are owned and controlled by the people who work in them, use their services or live in the communities around them. We believe that income inequality arises first and foremost in the workplace and it is there that the remedies must start. Can anyone imagine Sir Fred Goodwin being awarded his pay and perks if the Royal Bank of Scotland had been under employee-ownership?

The trade union movement has always been supportive of the idea of a more equal society, not only for its members’ direct interests but from the wider perspectives of social justice and social progress. This is why trade unions formed the Labour Party, to campaign for these broader aims and to achieve them through parliamentary legislation. Given that progress was made via the parliamentary route, it is understandable that the idea of transforming society through employee-ownership, co-operativism and other methods of economic democracy perhaps became less of a priority for both unions and the Labour Party.

We are now at a different point. The prospects for a “tax and spend” solution to making the UK a more equal society seem to be faint and, if anything, fading. None of the three major political parties show any sign of seriously committing to redistributing wealth. Even though this would seem the most sensible way out of our debt-laden economic circumstances all the talk is of public spending cuts which will mainly hit the poorer sections of society. We naturally support all trade union efforts to influence government, preserve jobs and boost wage levels for their members in these circumstances. However, we would also like to see the trade union movement focus even more on the injustice of top pay compared to low pay – and to stress the links between the two – and to place itself centre-stage in a campaign to transform the very nature of our economy in order to achieve the healthier, happier and sustainable society we all want.

GUEST POST: Kate Pickett is co-founder of The Equality Trust, which campaigns to halve income inequality in the UK. She is a Senior Lecturer in Epidemiology at the University of York and a National Institute for Health Research Career Scientist. She studied physical anthropology at Cambridge, nutritional sciences at Cornell and epidemiology at the University of California, Berkeley. Kate is the co-author of The Spirit Level: Why More Equal Societies Almost Always Do Better.