Editor’s Note: This guest post was written by Levin Nock, PhD, PMP, a research analyst and project manager who lives in Portland, Oregon.
If you follow Sightline, you probably believe what I do: that measurement matters. You probably appreciate that Sightline compares the Northwest’s performance on key sustainability indicators to other places in the world—the places that have done best at achieving robust human health, for example, or prospering with efficient energy and land use. But what if there’s a mystery indicator out there? Some important-but-overlooked variable that could explain many of the other variables?
If so, focusing on that single variable could open the way for policy to improve multiple measures at the same time. Rather than addressing each “dependent variable” independently, perhaps at great expense and with limited success, policymakers could address the root cause of many of the performance differences between the Northwest and the most successful places in the world.
Let’s call this single mystery variable ‘E’. Extensive peer-reviewed research indicates that many (though not all) of our problems are strongly affected by it. Here is a chart showing a composite index of wellbeing, with data points for the forty richest countries on earth.
Here are some charts of a few individual performance measures. Some charts have more data than others, depending on the availability of particular measurements in each country.
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While ‘E’ doesn’t explain everything, it appears to play an important role. There’s a general trend: countries with higher values of ‘E’ tend to perform better in various measures of wellbeing. Countries with the lowest values of ‘E’ appear to be relegated to low performance, with a few exceptions such as infant health in Singapore. Similar charts of other measures are available—these are just some samples.
So what is ‘E’? Drum roll, please, while scrolling to the answer:
‘E’ represents Economic Equality—the balance between the folks lower on the socioeconomic ladder, and the folks higher up. In Sweden, for example, people in the poorest quintile of the nation’s population are more than 25% as rich as people in the richest quintile. In the USA, which is the worst performer in most of these charts, people in the poorest quintile of population are less than 12% as rich as people in the richest quintile. In these examples, “rich” refers to household income after taxes and benefits, adjusted for the number of people per household. But the charts are not sensitive to the exact definition of “equality” that is chosen.
These charts are adapted from the book “The Spirit Level” by epidemiologists Richard Wilkinson and Kate Pickett. Their charts have more numbers, labels, definitions, explanations and statistical confidence levels, if you want details. Additional information, including a slideshow and original data, is available on their website, www.equalitytrust.org.uk. By the way, a spirit level is a carpentry tool, with an air bubble encased in a curved glass tube of alcohol, used to check whether a surface is level.
Wilkinson and Pickett devote a substantial portion of their book to the question of correlation versus causality. In my opinion, many of their arguments for causality are compelling. Even if the authors are only right about causality for half of the measures that they claim, this would still constitute a dramatic step forward in evidence-based policymaking.
The book is full of evidence that in a more unequal society such as the US, there is more stress on most participants—not just those on the bottom rungs of the socioeconomic ladder. Compared to a more equal society, we spend more effort competing and correspondingly less effort cooperating. This has broad implications, from physiology to public safety to economics. To quote from “The Spirit Level”, p. 181:
Rates of mental illness are five times higher in the most unequal compared to the least unequal societies. Similarly, in more unequal societies people are five times as likely to be imprisoned, six times as likely to be clinically obese, and murder rates may be many times higher. The reason why these differences are so big is, quite simply, because the effects of inequality are not confined just to the least well-off: instead they affect the vast majority of the population.
Various options exist to promote greater income equality, in policy and in business practices. Among the top performers, Sweden has a high income tax and high expenditures for social welfare, while Japan has equalitarian pre-tax salaries, low income tax and low welfare expenditures. In the various states of the USA, Vermont and New Hampshire are both top performers for income equality. Vermont has a high income tax and high social benefits, while New Hampshire has egalitarian pre-tax incomes and no income tax. A business that is owned and managed by workers offers some of the benefits of an equal society to those workers, in a microcosm of the larger society. The particular policies and historical paths leading toward economic equality appear to be less important than the actual result.
This is not a moral argument that society should be more fair economically. Nor is it a utopian argument that society should abolish all income differences. This is a practical argument, for how the Northwest can copy the success of actual, present-day, democratic states and countries. If the Northwest hopes to achieve top global performance in sustainability, it appears that the region must first address economic equality as a root cause of performance differences.