The New Politics of Inequality
This short paper is a summary of my inaugural lecture, given on April 29th 2015. A longer version of the lecture notes are available here, and a video of the lecture will be available in the near future.
In some ways those of us who have long worried about rising inequality ought to be cheered by the prominence now being given to the subject in popular debate. After several decades in which socio-economic inequality was firmly off the agenda, reduced to the discussion only of equal opportunities, inequality is now firmly back on the political agenda. Academic and popular texts, campaigning organisations and powerful international institutions all draw attention to the disproportionate economic and political resources accruing to the ‘1%’ made famous in the sloganeering of the Occupy movement. But I argue in this lecture that this New Politics of Inequality might not be quite so progressive as it at first appears.
My argument is that the New Politics of Inequality is mainly concerned to contain the negative affects of inequality in terms of social and political stability, rather than an ethical commitment to egalitarianism. This is the case whether it is found in Thomas Piketty’s high profile Capital in the Twenty First Century or OECD and IMF reports (see here for a critique of the New Global Politics of Inequality).
Rising inequality is a common international trend internationally: many countries have experienced increasing inequalities over the last thirty years. Oxfam’s Even it Up campaign has drawn much attention to this. Elsewhere I argue that this is driven by increasing world market integration, resulting in increasing competition between emerging markets and existing ‘advanced’ economies like ours. However, it is also important to examine the specific conditions that pertain inside particular countries; while many countries have witnessed increases in inequality, they are by no means all the same. For this reason, in the lecture I go on to explore some specific aspects of increasing inequality in the UK.
Inequality has been rising in the UK for some time. It rose dramatically in the 1980s, stalled in the 1990s before rising again just before the great recession. Since then, some people draw attention to the fact that headline measures show that inequality declined after 2008. I argue that this is misleading and that data lag and measurement issues are hiding the true situation. Reductions in welfare generosity after 2012, changes in employment conditions and earnings since 2008 and the recovery of asset values owned largely by better off households in the last two years will mean that over the short-term we can expect to see headline inequality rise again to at least pre-crisis levels.
Source: IFS Incomes Data, derived from the Households Below Average Income, Family Expenditure Survey and Family Resources Survey. See: http://www.ifs.org.uk/fiscalFacts/povertyStats, accessed 2-04-15.
Source Hills et al. (2015).
In this sense, the effect of the crisis has been to reinforce existing inequalities rather than reduce them. Earnings have fallen disproportionately at the bottom of the income distribution than at the top, full time earnings have declined more for women more than for men, and the household incomes of ethnic minority groups have for the most part fallen by more than for white households. Ethnic minority households also remain more likely to experience poverty and have even larger income differentials than do white households. But perhaps the biggest shift experienced in the crisis has been the structural decline in the position of young people in terms of employment, earnings and wealth accumulation. Given what we know about the prospects for young people who enter the labour market during a recession, we can expect that these disadvantages will continue through their life-course.
Source: Hills et al. (2015).
It is the experience of these younger groups that I argue will drive a longer-term structural pressure toward greater inequality, similar to that which Piketty identifies. First, the data shows that younger age groups experience greater income inequality than do older cohorts. Second, over and above their labour market disadvantage in terms of employment and earnings, those who entered the labour market during the crisis are much less likely to own their own home than were those who entered the labour market before the crisis. Just short of 50% of those below 35 are living in private rented accommodation. They are not benefiting from the falling mortgage costs associated with homeowners. Third, because of the unequal accrual of housing, financial and pension assets in their parents’ generation some will be better protected by inheritance than others.
Of course these are long-term pressures and much can happen to contain and offset them, before they are fully realised. This is though the problem associated with the New Politics of Inequality: polarisation within the ‘new middle classes’. It is this structural pressure toward polarisation, rather than just the experiences and disproportionate influence of the ‘1%’ that I will be discussing in the lecture. One possible outcome of this inter-generational polarisation is increasing political and social destabilisation and of course it is this destabilisation that I claim the New Politics of Inequality is most concerned to avoid.
So what evidence is there of the New Politics of Inequality in UK domestic politics?
The language of the two main parties as they seek to differentiate between a deserving and undeserving poor or to protect a ‘squeezed middle’ from the cost of living crisis is certainly evidence of a recognition of the way that inequality is experienced in ‘everyday life’.
The shifting electoral landscape and the emergence of smaller parties is also partly reflective of this. The SNP may have lost the referendum in which they made inequality a major feature, but the medium term impact of that campaign may be to make them ‘king makers’ in a hung Westminster parliament. UKIP may to some extent look like a two issue (Europe and immigration) party, but its supporters are both socially conservative and very concerned about inequality. The Green Party has made inequality a key issue alongside environmental sustainability. So to that extent, inequality is emergent as a key political issue in electoral as well as protest politics.
This is the agenda for my research over the next few years. In a range of projects with colleagues in our Global Inequalities research programme at Leeds Beckett University and collaborators at other Universities in the UK and beyond, I will focus on:
- The way in which household and community structures interact with public services, housing and labour markets to produce and reproduce inequality over time. This research is being undertaken as part of a large international collaboration.
- The extent to which the New Politics of Inequality is sustained over time and whether it represents a real and substantive concern to limit or even reduce inequality in order to contain destabilisation. An alternative is that the New Politics of Inequality becomes merely an attempt at discursive legitimation of the status quo.
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