Bridging the Income Gap

An interview with Richard Wilkinson

The Tyee has published my interview with Richard Wilkinson under the title A Visit with the Income Gap Doctor. Here's an excerpt from the introduction:

Wilkinson has been charged, even by his admirers, with turning income inequality in a "theory of everything" that explains obesity and homicide, depression and addiction. Even so, it explains a great deal: Canada and the U.S. states with the narrowest income gaps, like Vermont and New Hampshire, also share low crime rates. States with wide gaps, like Louisiana, have the highest murder rates. 

Unsurprisingly, Americans tend to dismiss Wilkinson's argument as just another pretext for "income redistribution" from the rich to the poor. But it is gradually becoming a political issue, and may well become still more so as millions of Americans remain hopelessly unemployed. 

Richard Wilkinson's most recent book, The Spirit Level, co-authored with Kate Pickett, appeared in Britain in March 2009 and in North America earlier this year. On a tour promoting the book, Wilkinson was recently in Vancouver and sat down with The Tyee to talk about the book's themes -- and its impact.

Canada: The rich get rich, and the poor get sick

Via The Star, a column by Joe Fiorito about a diabetes information meeting: The rich get rich, and the poor get sick. Excerpt:

Dennis Raphael spoke first. He is the one I’d come to hear. He is a health policy guy from York University. He pinned health and wealth together, or rather he pinned illness directly on poverty: 

The death rate of the poorest people has risen from 17 to 25 people per 100,000, since the mid-1980s. 

He said social injustice is killing us on a grand scale, and it wasn’t just him saying this, it was the World Health Organization. 

He did a diabetes study a while back, and found a relationship between Type 2 diabetes and income: If you make less than $30,000 a year, your chances of developing Type 2 diabetes are double those of people making $80,000 a year. 

My neighbour nodded in agreement. 

But — and this is an outrage — the people in Raphael’s study who developed the disease said they could not afford the diet they were supposed to follow. 

He said our rate of poverty is double that of the Scandinavian countries, but poor people have better benefits, and better health, there. 

His observation? 

“Our economy is greater than it was in the 1970s, but the distribution of income is worse.” 

His answer? 

“We have to up the benefit levels, up the minimum wage, develop a national housing strategy, and close the gap between rich and poor.”

U.S. life expectancy slightly decreases

Via Xinhua: U.S. life expectancy slightly decreases. Excerpt:

U.S. life expectancy dropped slightly in 2008 after mostly increasing over the years, according to a new report released by the Centers for Disease Control and Prevention (CDC) on Thursday. 

The preliminary estimate of life expectancy at birth for the total population in 2008 is 77.8 years, compared with 77.9 years in 2007, the report shows. 

Life expectancy for males and females decreased about one tenth of a year each. It went from 75.4 to 75.3 years for males in 2008, and from 80.4 to 80.3 years for females. 

The report also finds that the death rate in the United States for 2008 was 813.3 per 100,000 population, 1.2 percent higher than that of 2007. 

The infant mortality rate for 2008 was 6.59 infant deaths per 1, 000 live births, a decrease of 2.4 percent from the 2007 rate of 6. 75. With the exception of 2002 and 2005, the infant mortality rate has remained the same or decreased significantly each successive year from 1958 through 2008.

To manage health costs, invest in social well-being

Via The Globe and Mail, a great op-ed piece by economist Jim Standford: To manage health costs, invest in social well-being. Excerpt:

There is now hard medical evidence that a person’s economic status and social participation directly affects their physical health. And that, in turn, affects the cost of health care. 

This is not vague, bleeding-heart sentimentalism; it is hard scientific proof. For concrete physiological reasons, human health suffers when people are subjected to prolonged hardship, stress and disparity. The physiology of this connection involves many body systems, including the impact of stress and unhappiness on metabolism, hormone production, circulatory function and other systems. 

This research is well-established in medical journals, was popularized by British epidemiologist Richard Wilkinson in his best-seller The Spirit Level, and was further affirmed by the World Health Organization in a recent expert commission. 

What does all this mean for health-care finance? It means that addressing the underlying social problems that scientists now know cause so much ill health, can help to rein in health costs. 

Governments must therefore be holistic in their programming and budgeting, instead of obsessing on reducing one budget line without regard to how that may affect other expenses. 

Diabetes, for example, is an illness with especially strong links to poverty and inequality. Incredibly, poverty is a greater risk factor in diabetes than diet or exercise. Canadians with annual incomes under $30,000 are at least twice as likely to contract diabetes as those with incomes over $80,000. 

Poverty thus drives up the overall incidence of diabetes – and public-health costs in the process. Researchers estimate that one in 10 hospital admissions in Canada are due to diabetes and its complications; the Canadian Diabetes Association tallies total direct health costs at over $13-billion per year. 

Ironically, however, while medicare shells out billions to treat diabetes, we penny-pinch when it comes to supporting poor people so they don’t get it in the first place.

Americans get a sense of their own inequality

Via The Globe and Mail: Americans grapple with how much should be sacrificed by whom. Excerpt:

When he kicked off the epic political debate over how to reverse his country’s debt spiral this week, Barack Obama underscored the “hard truth” that slashing the deficit will entail “broad sacrifice” from all Americans. 

But as the co-chairmen of the President’s “fiscal responsibility” commission formally tabled their plan to cut nearly $4-trillion (U.S.) from projected deficits by 2020, Mr. Obama’s core premise was already being challenged by a member of his own party. 

“The top 1 per cent of Americans owns 34 per cent of America’s private net worth right now, and the bottom 90 per cent owns just 29 per cent,” debt commission member Jan Schakowsky told the panel’s final meeting on Wednesday. “So we’re not starting at the same point when we say we need to share the sacrifice.” 

Ms. Schakowsky, the Democratic congresswoman for a working-class suburban Chicago district, indicated she will not support the plan put forward by co-chairs Alan Simpson and Erskine Bowles when commission members vote on Friday. 

The reforms it envisions, she warned, would inflict disproportionate pain on those “who have not been part of the party” that wealthy Americans have enjoyed during successive booms since the 1980s.

More on the CCPA inequality report

Armine Yalnizyan has a commentary in The Globe and Mail: We're ignoring inequality at our peril. Excerpt (but read the whole article, and then download the CCPA report):

Concern about growing inequality has been a hot topic in the U.S. for the past few years, triggered by the path-breaking work on income distribution by economists Thomas Picketty and Emmanuel Saez in 2003 and Emmanuel Saez and our very own Mike Veall in 2005. 

That research took the story up to the year 2000. When Saez updated the story for the U.S. last year, it triggered a storm of debate in the media and among people trying to cope with a troubling dynamic – the gains from growth are increasingly concentrated in the hands of the rich. 

Earlier this year at the Canadian Economics Association annual meetings, Mike Veall showed slides from the Canadian updates, running to 2007. On Wednesday, the Canadian Centre for Policy Alternatives released a report based on these unpublished data, generously shared by Prof. Veall. 

It shows that this generation of rich Canadians now takes a bigger cut of the action than any previous generation. The richest 1 per cent accounted for a third (32 per cent) of all income gains from economic growth between 1997 and 2007. This is four times the share of growth in the 1960s, and double the share of growth in the Roaring Twenties. 

The richest 1 per cent accounted for 14 per cent of all personal income by 2007 -- levels comparable to the mid 1920s.