6.7.2.3 Setting Intervention Policies for Inequality

(This is an archived extract from the book Patterns of Power: Edition 2)

Incomes vary across a vast range, from those who are starving up to the mega-rich. This 6-layer model is offered to provide clarity in defining objectives, when seeking political support for policy interventions, so that people can see the justifications for each measure:

These levels, and the policy instruments which can be used to adjust the differentials between them, are described below, starting from the bottom:

· Starvation is self-explanatory: it is when people are dying.

· A humanitarian intervention level might be defined as providing some of the basic requirements which are listed in the Universal Declaration of Human Rights, such as “food, clothing, housing and medical care” (Article 25). The United Nations is the appropriate forum for negotiating the level at which aid should be given, and it can coordinate relief operations.

· A national level of socio-economic entitlements for people who cannot work might be set somewhat higher than the humanitarian intervention level, if that country felt able to afford it. People in wealthier countries need more money to maintain a sense of dignity than those in poor countries: in Sen’s terminology they have a different “relational perspective”.[1] National entitlements are negotiated in the country's political system (6.7.1).

· National politicians set a level for a minimum wage. The amount by which the minimum wage exceeds the level of welfare benefits is a motivation to work, which is part of its economic impact (3.3.3.3), and it is also important politically – so that those in work don’t resent the level of benefits paid to those who don’t work.

· The national average income is, by definition, above the minimum wage; it depends upon a country’s economic performance.

· The incomes of the wealthiest people tend to be very much higher than the average – a disparity which is increasing (3.5.6.2). The differences between incomes are a reflection of the economic inequality in a society.

There are several ways of reducing the disparities in people’s economic wellbeing, as described in the next section (6.7.2.4).