Table Of ContentE
0 E I T
THE
SPIRIT
LVEEL
D
RICHARD WILKINSON
AND KATE PICKETT
ThSep iLreivte l
Why Greater Equality
Makes Societies Stronger
BLOOMSBURY PRESS
New York Berlin London
For our parents
Don and Marion Chapman
George and Mary Guillemard
Copyright © 2009 by Richard Wilkinson and Kate Pickett
Foreword copyright© 2010 by Robert B. Reich
All rights reserved. No part of this book may be used or reproduced in any manner
whatsoever without written permission from the publisher except in the case of brief
quotations embodied in critical articles or reviews. For information address
Bloomsbury Press, 175 Fifth Avenue, New York, NY 10010.
Published by Bloomsbury Press, New York
All papers used by Bloomsbury Press are natural, recyclable products made from
wood grown in well-managed forests. The manufacturing processes conform
to the environmental regulations of the country of origin.
LIBRARY OF CONGRESS CATALOGING-IN-PUBLICATION DATA
Wilkinson, Richard G.
The spirit level : why greater equality makes societies stronger/
Richard Wilkinson and Kate Pickett.-lst American ed.
p. cm.
Includes bibliographical references and index.
ISBN 978-1-60819-036-2 (hardcover: alk. paper)
1. Equality. 2. Social mobility. 3. Quality of life. 4. Social policy. I. Pickett, Kate. II. Title.
HM821.W55 2009
306.01-dc22
2009030428
First published in Great Britain by Allen Lane, a division of the Penguin Group, in 2009
First published in the United States by Bloomsbury Press in 2010
1 3 5 7 9 10 8 6 4 2
T eset by Rowland Phototypesetting Ltd, Bury St Edmunds, Suffolk
yp
Printed in the United States of America by Quebecor World Fairfield
Contents
Foreword
V
Preface
lX
Acknowledgements
Xll
Note on Graphs
Xlll
PART ONE
MateSruicaclSe oscsFi,aa ill ure
r The end of an era 3
2 Poverty or inequality? 15
3 How inequality gets under the skin 3I
PART TWO
ThCeo sotfIs n equality
4 Community life and social relations 49
5 Mental health and drug use 63
6 Physical health and life expectancy 73
7 Obesity: wider income gaps, wider waists 89
8 Educational performance 103
9 Teenage births: recycling deprivation 119
Violence: gaining respect 129
IO
Imprisonment and punishment 145
II
12 Social mobility: unequal opportunities 157
THE SPIRIT LEVEL
PART THREE
A BetStoecri ety
1 3 Dysfunctional societies 173
14 Our social inheritance 95
1
Equality and sustainability
15 215
16 Building the future
229
Appendix
References
271
Index 299
Foreword
ROBERT B. REICH
Professor of Public Policy, University of California
Former U.S. Secretary of Labor
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V
THE SPIRIT LEVEL
argue, but greatly increase the happiness of the poor person. Others ground
their arguments in terms of hypothetical consent. John Rawls defends
redistribution on the grounds that most people would be in favor of it if they
had no idea what their income would otherwise be.
Nor have economists, whom we might expect to focus attention on such
a dramatic trend, expressed much concern about widening inequality. For
the most part, economists concern themselves with efficiency and growth.
In fact, some of them argue that wide inequality is a necessary, if not
inevitable, consequence of a growing economy. A few worry that it cuts
off opportunities among the children of the poor for productive lives-but
whether to distribute wealth more equally, or what might be gained from
doing so, is a topic all but ignored by today's economic researchers.
It has taken two experts from the field of public health to deliver a major
study of the effects of inequality on society. Though Richard Wilkinson and
Kate Pickett are British, their research explores the United States in depth,
and their work is an important contribution to the debate our country needs.
The Spirit Level looks at the negative social effects of wide inequality
among them, more physical and mental illness not only among those at
the lower ranks, but even those at the top of the scale. The authors find,
not surprisingly, that where there are great disparities in wealth, there are
heightened levels of social distrust. They argue convincingly that wide
inequality is bad for a society, and that more equal societies tend to do better
on many measures of social health and wealth.
But if wide inequality is socially dysfunctional, then why are certain
countries, such as the United States, becoming so unequal? Largely because
of the increasing gains to be had by being just a bit better than other
competitors in a system becoming ever more competitive.
Consider executive pay. During the 1950s and '60s, CEOs of major
American companies took home about 25 to 30 times the wages of the
typical worker. After the 1970s, the two pay scales diverged. In 1980, the
big-company CEO took home roughly 40 times; by 1990, it was 100 times.
By 2007, just before the Great Recession, CEO pay packages had ballooned
to about 350 times what the typical worker earned. Recent supports suggest
that the upward trajectory of executive pay, temporarily stopped by the
economic meltdown, is on the verge of continuing. To make the comparison
especially vivid, in 1968 the CEO of General Motors-then the largest
company in the United States-took home around 66 times the pay and
benefits of the typical GM worker at the time. In 2005, the CEO of Wal
Mart-by then the largest U.S. company-took home 900 times the pay and
benefits of the typical Wal-Mart worker.
VI
FOREWORD
What explains this trajectory? Have top executives become greedier?
Have corporate boards grown less responsible? Are CEOs more crooked?
Are investors more docile? Is Wall Street more tractable? There's no evidence
to support any of these theories. Here's a simpler explanation: Forty years
ago, everyone's pay in a big company-even pay at the top-was affected by
bargains struck among big business, big labor, and, indirectly, government.
Big companies and their unions directly negotiated pay scales for hourly
workers, while white-collar workers understood that their pay grades were
indirectly affected. Large corporations resembled civil service bureaucracies.
Top executives in these huge companies had to maintain the good will of
organized labor. They also had to maintain good relationships with public
officials in order to be free to set wages and prices; to obtain regulatory
permissions on fares, rates, or licenses; and to continue to secure government
contracts. It would have been unseemly of them to draw very high salaries.
Since then, competition has intensified. With ever greater ease, rival
companies can get access to similar low-cost suppliers from all over the world.
They can streamline their operations with the same information technology
their competitors use; they can cut their labor force and substitute similar
software, culled from many of the same vendors. They can just as readily
outsource hourly jobs abroad. They can get capital for new investment on
much the same terms. They can gain access to distribution channels that
are no less efficient, some of them even identical (Wal-Mart or other big
box retailers). They can attract shareholders by showing even slightly better
performance, or the promise of it.
The dilemma facing so many companies is therefore how to beat rivals. Even
a small advantage can make a huge difference to the bottom line. In economic
terms, CEOs have become less like top bureaucrats and more like Hollywood
celebrities or star athletes, who take a share of the house. Hollywood's most
popular celebrities now pull in around 15 percent of whatever the studios
take in at the box office, and athletes are also getting a growing portion
of sales. As the New Yorker's James Surowiecki has reminded us, Mickey
Mantle earned $60,000 in 1957. Carlos Beltran made $15 million in 2005.
Even adjusting for inflation, Beltran got 40 times as much as Mantle.
Clark Gable earned $100,000 a picture in the 1940s, which translates into
roughly $800,000 today. Tom Hanks, by contrast, makes closer to $20
million per film. Movie studios and baseball teams find it profitable to pay
these breathtaking sums because they're still relatively small compared to
the money these stars bring in and the profits they generate. Today's big
companies are paying their CEOs mammoth sums for much the same reason.
Vil
THE SPIRIT LEVEL
In the world of finance, the numbers are yet greater. Top investment
bankers and traders take home even more than CEOs or most Hollywood
stars. For the managers of twenty-six major hedge funds, the average take
home pay in 2005 was $363 million, a 45 percent increase over their average
earnings the year before. The Wall Street meltdown took its toll on some of
these hedge funds and their managers, but by the end of 2009 many were
back.
This economic explanation for these startling levels of pay does not justify
them socially or morally. It only means that in our roles as consumers and
investors we implicitly think CEOs, star athletes, and Hollywood celebrities
are worth it. As citizens, though, most of us disapprove. Polls continue to
show that a great majority of Americans believes CEOs are overpaid, and
that inequality of income and wealth is a large problem.
In short, our nation's wealth is becoming even more concentrated at the
top. It has become the financial equivalent of hydrodynamics: Large streams
of income create even larger pools of wealth. The family of Wal-Mart
founder Sam Walton has a combined fortune estimated to be about $90
billion. In 2005, Bill Gates was worth $46 billion; Warren Buffet, $44 billion.
By contrast, the combined wealth of the bottom 40 percent of the United
States population that year-some 120 million people-was estimated to
be around $95 billion. Here again, the Great Recession of 2008-2009 took
a toll; some of these billionaires' fortunes were whittled down by 20 to 40
percent. But even then, they remained immense.
As citizens, we may feel that inequality on this scale cannot possibly be
good for us, and Wilkinson and Pickett supply the evidence that confirms
our gut sense of unease. Such inequality undermines the trust, solidarity, and
mutuality on which responsibilities of citizenship depend. It creates a new
aristocracy whose privileges perpetuate themselves over generations (one
of the striking findings in these pages is that America now has less social
mobility than many poorer countries). And it breeds cynicism among the
rest of us.
This is not to say that the superrich are at fault. By and large, "the market"
is generating these outlandish results. But the market is a creation of public
policies. And public policies, as the authors make clear, can reorganize the
market to reverse these trends. The Spirit Level shows why the effort to do
so is a vital one for the health of our society.
Berkeley, California
July 2009
VIII
Preface
People usually exaggerate the importance of their own work and
we worry about claiming too much. But this book is not just another
set of nostrums and prejudices about how to put the world to
rights. The work we describe here comes out of a very long period
of research (over fifty person-years between us) devoted, initially,
to trying to understand the causes of the big differences in life
expectancy - the 'health inequalities' - between people at different
levels in the social hierarchy in modern societies. The focal problem
initially was to understand why health gets worse at every step down
the social ladder, so that the poor are less healthy than those in the
middle, who in turn are less healthy than those further up.
Like others who work on the social determinants of health, our
training in epidemiology means that our methods are those used to
trace the causes of diseases in populations - trying to find out why
one group of people gets a particular disease while another group
doesn't, or to explain why some disease is becoming more common.
The same methods can, however, also be used to understand the
causes of other kinds of problems -not just health.
Just as the term 'evidence-based medicine' is used to describe
current efforts to ensure that medical treatment is based on the best
scientific evidence of what works and what does not, we thought
of calling this book 'Evidence-based Politics'. The research which
underpins what we describe comes from a great many research
teams in different universities and research organizations. Replicable
methods have been used to study observable and objective outcomes,
and peer-reviewed research reports have been published in academic,
scientific journals.
lX
