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Cohesion Sheffield: How to talk about inequality with friends and loved ones

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This article is the first in a short series of articles from Cohesion Sheffield exploring inequality and migration in the city.

Every day we're told that 'there is no alternative'. We're told that inequality is not only inevitable but that we need it. We're told that imbalances in wealth are the engine of growth.

But a new generation of economic thinkers has discovered that inequality is not only destructive for our health, our wellbeing and our communities, but for our economies as well.

Here are the most common myths you'll hear about inequality - and the facts you'll need to bust them.

"Inequality is necessary for an economically competitive society."

This old chestnut has long been used to justify lower taxes and relaxed attitudes to the super-rich, all in the name of kickstarting competition. But in his bedtime page-turner Capital in the Twenty-First Century, the economist Thomas Picketty pulls this fantasy apart.

In unequal societies, capital - owning property, land and the image of Mickey Mouse - now generates a higher return than work. This favours wealth accumulation not through making something useful, but by simply collecting rent.

"Inequality is wrong but it'll never change."

The idea that the economy is a law unto itself, unaffected by the actions of government, is one of famed economist Milton Friedman's fibs. In reality, governments intervene in the economy all the time, from taxation and subsidies to regulation and research & development.

In Sweden, which Oxfam says is the country most committed to reducing inequality, the government has raised income tax to tackle a widening wealth gap. Oxfam's report also found that a minimum wage and investment in education have a direct effect on inequality.

"What we want to be very clear about is that inequality is not inevitable, but the direct result of a government's policy choices," said Oxfam's Max Lawson.

"We can't afford to address inequality."

The top-tier super rich - the haves and the have-yachts - make more money than they know what to do with. It would take a worker earning the average Sheffield wage nearly four million years - 3,964,686 to be exact - to earn the same amount of money as Amazon President Jeff Bezos has today.

The world's 26 richest people own as much wealth as the poorest half. Give a poor person a pound and they'll spend it on something they need, boosting the local economy. Give a billionaire a pound and they'll stick it in the Cayman Islands. We have all the money we need to address inequality and end poverty. It's just in the wrong hands.

"Inequality is bad for the poor but good for the rich."

Even though it hurts those on the sharp end, common sense seems to tell us that inequality must at least be good news for the 'winners'. But even this is wide of the mark. In their book The Spirit Level, Richard Wilkinson and Kate Pickett show how rampant inequality doesn't even benefit the rich.

Citizens of more equal societies are healthier, happier, better educated, and are less likely to be victims of crime. This isn't just true of the poorest - it goes for everyone. In highly unequal societies like the US even the rich fare worse on these measures, despite being comparatively richer than the wealthiest elsewhere. Belonging to a fairer society is invaluable.

"Inequality means less cash in our wallets, but in a country with free healthcare for everyone, it doesn't affect our health."

The NHS doesn't discriminate between rich and poor, so inequality shouldn't affect our health. But even in the UK, where healthcare is free at the point of use, inequality wreaks havoc with our wellbeing. Rates of mental illness, obesity and child mortality are higher in poorer parts of Sheffield, while life expectancy is lower.

The Sheffield Fairness Commission found that along a single bus route running from the richer south of the city to the poorer north, life expectancy falls by a staggering 7.5 years for men and almost ten years for women. To put it bluntly, inequality makes us die sooner.

"Inequality may impact physical health, but mental health is all in the mind. It's not affected by society-wide trends like inequality."

The sequel to The Spirit Level, 2018's The Inner Level, lays bare the catastrophic damage inequality does to our mental health. Living in an unequal society reduces our ability to trust other people and makes us less likely to act kindly. If keeping up with the Joneses is the number one concern, we're not going to give away our cash anytime soon.

Seeing the glamorous lives of millionaires celebrated in the media tells us that we need to work our way up the greasy pole to find happiness. But this will never work; citizens of unequal societies report lower levels of wellbeing and life satisfaction. It turns out that money really can't buy happiness.

The UK isn't that unequal. It's a real problem in other countries, but not here.

The UK is obscenely wealthy by historical standards, which can give the illusion that we're all pretty well-off. But of 34 OECD nations, the UK ranks near the bottom for income inequality. Poorer nations like Greece, Slovenia and Slovakia have built fairer societies than ours.

Huge regional inequality, expressed in the UK's north-south divide, means that despite being one of its richest countries, the UK contains many of the poorest regions in Europe. Several UK regions are poorer than any region in France, Germany and all of north-west Europe. No wonder that Bob Kerslake, former chief exec of Sheffield City Council, recently said that regional inequality in the UK is now worse than the gap between East and West Germany before the fall of the Berlin Wall.

Even within Sheffield itself, levels of inequality are eye-watering. Only 3% of children in Ecclesall live in poverty, compared to 43% in Firth Park. From the south east to the centre of Sheffield the infant mortality rate almost doubles, while residents of more deprived areas of the city are more likely to need emergency hospital admission for cancer, coronary heart disease and other chronic diseases.

The reality: inequality isn't working

The reality behind the fantasy of status-based competition is that inequality just isn't working. It's not good for the most vulnerable in society - and it's not helping the wellbeing of the rich. On top of that inequality hampers our sluggish, slow-growth economy, where more money is made through property ownership than through real economic activity.

But by challenging the idea that large inequalities are necessary and inevitable, we can start to build a fairer society that works better for us all.

Sam Gregory

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