Article by Yifei Yan

Photo by Micha Lehmann on Unsplash

When it comes to social problems, the first thing that many people think of is “poverty” – they think that as long as no one is starving, society will be stable. With the gradual improvement of social development and people’s living standards, the problem of “income inequality” is becoming more and more acute. People began to think about whether “income inequality” was more serious than absolute poverty in today’s society. In today’s society, especially in developed countries, most people can actually meet their basic living needs. Although “poverty” is a very serious problem, it is the “gap between people” that is more likely to make society anxious and divided. As Wilkinson and Pickett wrote in the book The Spirit Level: Why Greater Equality Makes Societies Stronger: “Where income differences are bigger, social distances are bigger and social stratification more important.” (Wilkinson, R. G. and Pickett, K, 2010). In fact, inequality, like a chronic poison, will continue to erode society. It will not make people “poor” overnight, but it will make the whole society more anxious, indifferent, and more prone to problems. In these developed countries, absolute poverty is no longer the most serious social problem. However, in some developing countries or low-income areas, social problems are still closely related to the scarcity of survival resources. In other words, absolute poverty is still an important social issue in these countries.

If poverty means “no”, then inequality is more like “visible but not available”. In a society with a huge gap between the rich and the poor, people are not only divided materially, but also psychologically begin to be “dissatisfied”. Jealousy and anger caused by huge gaps can lead to anxiety, inferiority, and gradually erode the trust between people. Sociologists Wilkinson and Pickett wrote in the book  The Spirit Level: Why Greater Equality Makes Societies Stronger: “Inequality has pernicious effects on societies: eroding trust, increasing anxiety and illness , encouraging excessive consumption.” (Wilkinson, R. G. and Pickett, K, 2010). In fact, according to the data of the OECD (OECD, 2024), income inequality will further exacerbate the inequality of family wealth. “On average, households in the top 10% of the wealth distribution own more than half (52%) of all total household wealth, and this share is as high as 79%  in the United States ”（OECD (2024), Society at a Glance 2024: OECD Social Indicators, OECD Publishing, Paris.) This shows that in these developed countries, a few rich people tend to monopolize most of their property. In addition, according to the data of the OECD (OECD, 2024), the Gini coefficient of the United States is about 0.39, which is much higher than the income inequality (index, OECD data) in Nordic countries such as Norway and Finland (OECD, 2024), which means that the income distribution of the United States is more concentrated in the rich class. The income distribution of Nordic society is more balanced. The results are also obvious: Nordic countries have higher social trust, lower violent crime rates, and higher life satisfaction. It can be seen that income inequality not only causes a huge wealth gap, but also brings anxiety and exacerbates social tensions.

Of course, thinking that income inequality is more serious does not mean that “poverty” is not important. For many people, the most direct root cause of social problems is still the lack of survival resources, which is called “absolute poverty”. What we call “absolute poverty” actually means that people cannot even meet the most basic living needs, such as food, … clean drinking water, medical services and a safe living environment. As the United Nations Development Programme (UNDP) says, “Multidimensional poverty recognizes that people can be poor in many ways — in health, education, and living standards — not just in income.” (UNDP, 2023).  This sentence illustrates very well that poverty not only means lack of money, but also a multi-dimensional shortage of resources. For example, in sub-Saharan Africa, more than 58% of the population lives in multidimensional poverty, and they face serious inadequacy in education, health care and access to public resources (United Nations, 2022). To give another example, in the Salamat area of Chad, research shows that nearly 98% of residents are identified as suffering from multi-dimensional poverty (Oxford University, 2015). Obviously, compared with “income inequality”, “poverty” is the most serious social problem faced by people in these areas. In these areas, “poverty” permeates all aspects of their lives in various forms.

Absolute poverty reveals the lack of basic needs. Survival is a basic need, and income inequality reflects the unfair allocation of social resources. Both affect social problems together, but income inequality is particularly prominent in developed countries.

Reference list

• OECD (2024) Society at a Glance 2024: OECD Social Indicators. Paris: OECD Publishing. Available at: https://doi.org/10.1787/918d8db3-en
• OECD (no date) Income inequality (indicator).
• University of Oxford (2015) World’s poorest regions are not always where you’d expect. Available at: https://www.ox.ac.uk/news/2015-01-07-world%E2%80%99s-poorest-regions-countries-you-wouldn%E2%80%99t-expect
• United Nations (2022) Statistical Annex to the Sustainable Development Goals Report 2022. Available at: https://unstats.un.org/sdgs/files/report/2022/E_2022_55_Statistical_Annex_I_and_II.pdf
• United Nations Development Programme (UNDP) (2023) Multidimensional Poverty Index (MPI). Available at: https://hdr.undp.org/data-center/thematic-composite-indices/multidimensional-poverty-index#/indicies/MPI
• Wilkinson, R. G. and Pickett, K. (2010) The Spirit Level: Why Greater Equality Makes Societies Stronger. New York: Bloomsbury Press.

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