The Inequality Predicament.

• Author: Jomo K.S.

MACROECONOMIC POLICIES, financial globalization and changes in labour market institutions have exacerbated inequality in recent decades, not only in income and wealth but also in access to education, health care and social protection, as well as political participation and influence.

A variety of factors has conspired to worsen the transmission of inequality from one generation to the next, even within communities experiencing rapid economic growth. This context shapes the transmission of knowledge, social responsibility and life chances, all of which can put communities at risk. The tremendous demographic changes in the world have exacerbated these problems profoundly.

As surveyed in The Inequality Predicament, Report on the World Social Situation 2005, published by the UN Department of Economic and Social Affairs (DESA), few countries have proved immune to the global trend of rising inequality or to its consequences, for example in terms of education, health and welfare inequalities. There is no simple causal relationship linking poverty and inequality to violence. Nevertheless, disparities and the sense of deprivation do contribute to resentment and social instability, threatening security. Faced with bleak life prospects and feeling excluded, young people, in particular, often experience anomie and may turn to antisocial behaviour, including violence. Nor is there a simple explanation of what causes poverty. Clearly, however, poverty arises from various complex conditions requiring multidimensional approaches. It is hard to imagine, for example, how to "make poverty history" without also generating enough decent work, educational opportunities and health care for all.

The world has seen some progress on some fronts. Access to education for girls has improved in recent decades and some gender gaps have been reduced. Despite AIDS and the resurgence of malaria and tuberculosis, life expectancies have increased in much of the world due to some public health gains. Overall, however, the inequality gaps are large and in many cases growing. The most important determinant of income inequality today is wealth inequality, with the increasing concentration of asset ownership principally responsible for greater income inequality in most countries in recent years. Meanwhile, growing unemployment, widening skill and productivity gaps, as well as the "informalization" or "casualization" of labour markets, have exacerbated income inequalities...