Rising income inequality is linked to political turmoil and the resolution for the same is caught in conflict to maintain status-quo, says UN report
Income inequality is increasing worldwide and within specific nations, and that's producing political turmoil, too, a recent United Nations report says. "Rising inequality creates discontent, political dysfunction and can lead to violent conflict," the report warns, in a statement buried deep in its 218 pages.
"But the same forces that produce the widening gap between the rich and the rest of us can be harnessed, by governments and by international cooperation, to start to close the chasm," UN Secretary-General António Guterres adds. But only if they want to, he notes. "So far, they don't," he warns.
The World Social Report 2020: Inequality In A Rapidly Changing World, by the UN's Department of Economic and Social Affairs, paints a gloomy picture of the widening income gap. It warns of the negative political impact, too. The report is available on the UN website.
"Without appropriate policies and institutions in place, inequalities concentrate political influence among those who are already better off, which tends to preserve or even widen opportunity gaps," the report says. "Growing political influence among the more fortunate erodes trust in the ability of governments to address the needs of the majority."
"This lack of trust, in turn, can destabilise political systems and hinder the functioning of democracy. Today, popular discontent is high even in countries that have fully recovered from the 2008 financial and economic crisis and have benefited from steady growth in recent years."
And the rich seize political processes to their advantage, worldwide, the report adds, just like in the U.S. That leads to mistrust of institutions and growing unrest.
"In principle, rising inequality should become a rallying cry for greater redistribution through progressive taxation and more comprehensive public service provision. However, this is often not the case. People in positions of power tend to capture political processes, particularly in contexts of high and growing inequality."
"Without strict checks and balances to prevent it, big corporations and the wealthy may use their position and resources to lobby in support of their interests, raise legal challenges to progressive tax legislation or promote communications and media campaigns to influence, for example, public perceptions of redistribution."
"A strong middle class can act as a counterbalance to the interests of wealthier groups by demanding better and more accessible public services, infrastructure and social protection. Where the middle class is small or shrinking, it exerts insufficient political pressure."
The report says 71 per cent of the world's people live in nations where income inequality is increasing. That group includes the two nations with the largest economies, the U.S. and China and the two with the largest populations, China and India.
There are also widening gaps within nations, principally between cities and the surrounding countryside. There are growing income gaps between cities within individual countries, too. That's important, the UN notes, because, for the first time in human history, most of the world's people live in urban areas.
The report documents deep divides within and across countries despite an era of extraordinary economic growth and widespread improvements in living standards. The report also underscores how gender, along with ethnicity, race, place of residence and socioeconomic status, continue to shape the chances people have in life.
In some parts of the world, divides based on identity are becoming more pronounced. Meanwhile, gaps in newer areas, such as access to online and mobile technologies, are emerging. Unless progress accelerates, the core promise the UN laid out in 2005, "to leave no one behind," will stay distant and miss the agency's 2030 target date.
Rapid technological change, individual access to it and benefit from it, is not the only contributor to the growing gap between the rich and the rest. Discrimination based on age, sex, race, ethnicity, religion, disability, country of origin and socio-economic status widens the gap.
And increasing urbanisation widens the chasm between city and countryside. Rural areas have declined to 45 per cent of the globe's population but they have 80 per cent of its poor. Forced migration of people displaced by conflict or job loss due to change doesn't help. And the climate crisis also makes things worse, Guterres reports.
In many places, the growing tide of inequality could further swell under the force of these megatrends. Income inequality increased in most developed countries and in some middle-income countries, including China and India, since 1990. Inequality is decreasing, however, in most countries of Latin America and the Caribbean and in several African and Asian countries over the last two decades.
The report says solutions to income inequality exist but admits inaction to reduce the gap between the rich and the rest of us is due to a combination of corporate and class clout, weakened opposition and lack of political will.
"Mobilising support for many of the policy responses to inequality can be an uphill battle. Depending on how they are designed and implemented, efforts to reduce inequality will inevitably challenge the interests of certain individuals and groups," the UN says.
Improved child health and more access to primary education helped lessen the income gap between the developed nations and the developing nations. But after the primary grades, progress stalls.
"Disparities in secondary school attendance by ethnic group, wealth quintile and educational level of the household head increased since the 1990s in developing countries with data. Gaps in learning outcomes are large and persistent as well," the report says.
Such inequalities have historical roots but often continue even after the conditions that generated them change. Ethnic minorities, for instance, often remain disadvantaged even in countries where special efforts are made to promote their inclusion. Members of groups that suffered from discrimination in the past start off with fewer assets and lower levels of social and human capital than other groups. While prejudice and discrimination are decried around the globe, they remain pervasive obstacles to equal opportunity.
The more unequal a country or society is, the more slowly it grows and the harder it is for downtrodden and disadvantaged groups to break out of the cycle of poverty there.
The writer is the head of the Washington DC bureau of People's World. He is also the editor of Press Associates Inc. Views expressed are strictly personal