From the TUC

Touchstone Extra: Fairness and Prosperity

18 Jul 2011, by in Economics

report coverTouchstone Extra: Fairness and Prosperity

The UK is a far more unequal society now than it was 30 years ago, and three-quarters of the public agree that the gap between rich and poor in the UK is too high. But if policymakers were to enact policies to reduce inequality, would this jeopardise the UK’s economic performance?

Today’s new Touchstone Extras pamphlet, written by Howard Reed, reviews the latest evidence on the relationship between inequality and economic performance across countries and finds no support for the idea that there is a ‘trade-off’ between inequality and prosperity. Indeed, there is strong evidence that countries with higher inequality have worse performance on a range of health and social outcomes.

The report also discusses theories that can rationalise these findings, and recommends policies which would help reduce inequality from its current very high level in the UK.

2 Responses to Touchstone Extra: Fairness and Prosperity

  1. Vic Wilson
    Jul 18th 2011, 6:33 pm

    J Stacey Adams – Equity theory on job motivation

    When people feel fairly or advantageously treated they are more likely to be motivated; when they feel unfairly treated they are highly prone to feelings of disaffection and demotivation. The way that people measure this sense of fairness is at the heart of Equity Theory.

    If we feel that our inputs are fairly rewarded by outputs (the fairness benchmark being subjectively perceived from market norms and other comparable references) then generally we are happier in our work and more motivated to continue inputting at the same level.
    If we feel that our ratio of inputs to outputs is less beneficial than the ratio enjoyed by referent others, then we become demotivated in relation to our job and employer.
    Some people reduce effort and application and become inwardly disgruntled, or outwardly difficult, recalcitrant or even disruptive. Other people seek to improve the outputs by making claims or demands for more reward, or seeking an alternative job.
    Equity Theory reminds us that people see themselves and crucially the way they are treated in terms of their surrounding environment, team, system, etc – not in isolation – and so they must be managed and treated accordingly.

  2. Vic Wilson
    Jul 18th 2011, 6:45 pm

    It could be concluded from Adam’s theory is that three quarters of the working public could be more productive in far happier working environment. If the so called captains of industry are so clever who apparently need to be excessively incentivised to remain motivated while they deem the rest of us don’t, why are are we in the current recession?