Reducing inequality is not only possible, but it’s actually happening all across the globe. Faiza Shaheen, the Inequality Program Lead at NYU, has been researching the conditions and policies that can lower inequality for years. She shares which countries have successfully done so, and speculates about whether the United States has a shot at joining them.
Dr. Faiza Shaheen is the Program Head for the Inequality and Exclusion Grand Challenge of the Pathfinders for Peaceful, Just and Inclusive Societies.
Twitter: @faizashaheen
Solutions to inequality https://medium.com/sdg16plus/solutions-to-inequality-962306388018
From Rhetoric to Action: Delivering Equality & Inclusion https://www.sdg16.plus/delivering-equality-and-inclusion
Website: https://pitchforkeconomics.com/
Twitter: @PitchforkEcon
Instagram: @pitchforkeconomics
Nick’s twitter: @NickHanauer
Goldy:
You may think from listening to this podcast that economic inequality is growing everywhere, all around the globe, but it turns out that’s not the case. There are some countries that are doing better than others. Here in the US, it’s been an awful few decades. But around the world, about a third of the countries have actually seen economic inequality decline over the past few decades, while another 30% have held steady. To dive into the numbers further and learn about what sorts of policies work and don’t work, I had the opportunity to talk with economist, Faiza Shaheen, an expert on economic inequality and a former Labour Party candidate for the UK Parliament. I hope you enjoy the conversation as much as I did.
Faiza Shaheen:
So, I’m Faiza Shaheen. I work at NYU at a think tank called Center on International Cooperation, and I’m a program director leading work on inequality and exclusion. I am definitely an inequality geek. I have a blog in it. If you look me up, I really only tweet about inequality.
Goldy:
Tell us a bit about the blog, what it addresses, and what inspired you to do it.
Faiza Shaheen:
Yeah, so the blog comes off the back of some work we’ve been doing globally, which involves 10 different countries, low, middle, high income countries, looking at what policies work to address inequality and exclusion. So it was partly about bringing out some of what we were finding in a more digestible format so people could read it and get a sense of what we were up to, but it was also because of personal experience, working as a political candidate in the UK during the 2019 general election we had there, knocking on doors and talking to people about actions we could take like a Green New Deal, like what we could do on wealth taxes, and often being faced with people that weren’t necessarily angry or against these ideas, but felt that these things were just a pipe dream. They weren’t really possible. And trying to bring these ideas alive and demonstrate they are possible, because they are literally happening in other countries, is a helpful way to inspire people that change can happen.
And so I was motivated by that experience, and also because things can feel quite hopeless right now. And so I think looking at solutions just helps us to feel a bit better about where we can go from here.
Goldy:
So let’s talk about that for a moment, because we certainly, here on this podcast, we talk about a lot of solutions. Inequality is one of our main issues. And we obviously wouldn’t be doing this if we didn’t think we could reverse it. But when you look at the world, yeah, there’s a lot of countries like the US and the UK where inequality has greatly grown over the past few decades, but that’s not universal, is it?
Faiza Shaheen:
No, it’s not universal. And I think sometimes when we just get stuck looking at our own countries, we can feel quite despondent. I think doing this work at looking across countries, whether it’s Uruguay or Costa Rica or Sierra Leone, or some other countries that perhaps are seeing inequality still be a big problem, but are at least actively trying to do something about it, it can show you some of the ingredients needed for change. And one thing that struck me was when we just did a simple analysis of the numbers of where inequality was going up and down.
So we took two or three decades of data where the countries, we were able to get that, and looked at various different measures of inequality, whether it be the Gini coefficient or what was going to the top 10%. And we found around a third of countries had actually made sustained change since 2000, so over a couple of decades had seen an inequality decline. And some of those countries were countries that had started from high levels of inequality, like Peru and Bolivia and Argentina, but some of those were countries as well like Botswana, Sierra Leone, some middle income countries that actually, when you looked at what they had done, they had actively tried to reduce inequality. It wasn’t that it just happened or it was just a matter of the numbers. Just as much as inequality is created through policy, the opposite is true too. So policy was undoing some of the inequalities that they had built up in their system.
Goldy:
Let’s talk about some of those policies. When you looked at the countries that were reducing inequality, what worked?
Faiza Shaheen:
As you can imagine, these things are complex, but one thing that really struck us when we looked across both the countries that had seen notable declines in inequality and those countries that had seen notable increases in inequality to the flip side, we saw three areas of action that were really important in explaining that story. The first was policies that elicit very clear, visible material change. So that might be things like social protection, welfare policies, but also health, education, affordable housing. Good job creation for instance, action on that area was critical.
Secondly, was something that I was a little bit surprised by, but actually just makes a lot of sense, which was that they’d taken action to build solidarity across groups. Often we think about tax policies and economic inequality separately to group-based inequalities, but these things actually go hand in hand, both in terms of who is left at the bottom of the spectrum. So whether we look at, in the UK example, ethnic minority groups, Pakistanis, Afro-Caribbean groups, but we see that repeated everywhere… But where we saw sustained change, governments had actively tried to bridge divides between groups. So whether that be through things like using post-conflict tools, even in non-conflict environments, to build, say Citizens’ Assemblies, ways in which to bring people together to discuss quite difficult issues. Whether that be about how you give communities the ability to drive change, and also looking at narratives, how politicians were talking about that country and trying to bring people together. Often we hear about divisive narratives, but what are the narratives that are trying to unify people?
So we saw change in visible and material outputs. We saw active efforts to build solidarity between groups and to address historic prejudices, thirdly, in securing credibility in government. And this was about tackling corruption. And I just want to say quite clearly that issues of corruption and state capture, as we might say in economics, aren’t just about low and middle income countries. We know that high income countries and our systems in the US and the UK are highly captured by the elites. So what do you do on corruption and get people to trust in government, and things like action that you can take to publish who really owns a company, for instance, free press, those sorts of things that came under that third category.
So it was about visible change, building solidarity, and securing credibility. And those three areas of action really were important part of whatever country did well or did badly.
Goldy:
Right. And to be clear when we talk about credibility, it’s not simply some absolute level of corruption. It’s about perceptions of corruption. If a country has a higher standard… The US has centuries of rule of law and a relatively un-corrupt government compared to some other parts of the world. It doesn’t take a lot of corruption to undermine trust in what we have.
Faiza Shaheen:
Yeah, that’s true. But of course, like you say, when you have these stories in the UK, for instance, with contracts around COVID protection equipment, for instance, where politicians have given those contracts to their friends. That immediately undermines that credibility in government. And in the US, of course, we have a political system that is deeply influenced by those with the pockets to spend. So yeah, it’s not just an issue for low, middle income countries. That issue of credibility and making sure that our political systems aren’t captured by the elites is important across the world.
Goldy:
Yeah. So speaking of the US, you write about prejudice as a tool for division. In one of your blog posts, I think you said pitting different forms of inequality against each other, and how that has led to rising inequality in the US. How big a role is that playing in places like the US and UK?
Faiza Shaheen:
A very, very big role. And it plays a big role in two ways. So first of course, it does divide us. So what happens is that we hear these stories of, in the UK, the working class has become just the white working class, even though the working class population is highly diverse, made up disproportionately in fact of black and brown people. But what’s happened is that there’s a very clear narrative that has emerged that says, the white working class is being left behind. And the reason that you’re being left behind is because these black and brown people are taking your assets and taking your jobs and taking your housing. And they don’t deserve that because they’re not really British, is the undertone of that.
And so it’s dividing those groups and it’s definitely erupted in different political outcomes, including outcomes like Brexit, but also in the way in which that distracts from the real story of inequality, because it means that we aren’t looking upwards. We’re looking across at our neighbors and we’re not looking at what those at the very top of society are doing to make sure our systems work in their favor. So they get richer, which we see every year, and even during the pandemic. It’s more extreme during the pandemic. And so these narratives have become extremely powerful.
And just to say, the UK and I live in New York now and see it here in the US very strongly too, whether it be about critical race theory or trans rights, these things are coming out. But in recent travels and in our conversations with countries, whether it’s Costa Rica or South Korea… I mean, South Korea, the left just lost an election because of a strong anti-feminist movement that has come up whereby young men think that the reason that they’re not getting jobs is because women are taking their jobs. And in Costa Rica, again, a kind of progressive government lost the election on the basis that the president had been sort of tarred with this image of only being for the gays. And so we see this again and again. It’s very worrying, because there is no actual contradiction between standing for working class groups and standing for equality for groups that have historically faced prejudices. There is absolutely no contradiction in terms of policies, but we definitely see it come alive all over the place.
Goldy:
Yeah. It’s a little depressing because in the US, we bemoan the fact that, of course, we are one of the more diverse countries in the world. It’s a nation of immigrants, people from all over, a mix of ethnicities, languages, religions, et cetera. And there’s almost like, you throw up your hands. Well, what can we do? It’s a heterogeneous country. It’s not like we’re Northern Europe where everybody’s white and you don’t have those kind of racial animosities built into the system. But you’re telling me that in very homogenous countries like South Korea, they’ll find the group to other and blame it on.
Faiza Shaheen:
Exactly. Unfortunately, it’s a tactic of the right to distract us. And so, the South Korean case was quite stark. And even in Costa Rica, some of the narratives coming out there weren’t about ethnic difference because there isn’t a lot of ethnic difference actually in Costa Rica in the way that there is in other South American countries. But also, when we look at left political parties, they’re also getting it wrong as well, because they often don’t have their own story to tell about unity or their own ways to demonstrate how policies are actually benefiting all working class groups or income groups. And there isn’t this thing about, one getting more than the other is mythical, and often the struggle is the same if you look across working class groups and little workers’ rights.
And actually, there’s a big story to be told there about the strength of those groups coming together, and that’s exactly why that group is divided. You see it when you see Amazon workers winning. You look at the group of people and they are a diverse group of working class people, working in warehouses and across the country to keep us going. So when you divide that group, then you are effectively also dividing and breaking the power that can really balance against what the power the elite has.
Goldy:
Is it as simple as, we need more class consciousness?
Faiza Shaheen:
There’s definitely some of that. I’m struck in the US how, I guess class isn’t as big a deal as I would say that it is in the UK. It is so striking in the UK, even in the way that people speak, that immediately tells you something about the class that they come from, although maybe I just haven’t lived here long enough to pick that up in the US.
Goldy:
We’re just really dishonest about class. We claim it isn’t a thing. And yet, people here are sensitive to it and they can tell the difference, and we behave on it as if there are classes.
Faiza Shaheen:
Yeah. I can see the same class patterns here in terms of work and hardship and lack of voice and power. I can see those here as I see them in the UK and actually many different parts of the world, but yeah, class consciousness is definitely part of it, and organizing, which is really hard work. Often doing the intellectual kind of writing the reports, but also having organized and done that activism, getting people together, getting them to believe in something and to fight together is really, really, really tough work that is completely necessary, and is a big part of, often we think about tax and redistribution and the things that government can do. But organizing communities is just as important, if not more important at this point.
Goldy:
Right. So clearly you mentioned taxes and redistribution, and we know that is a tool for addressing inequality. We know that because in the US and in UK and elsewhere, it was used to help reduce inequality for decades before that system started to get undermined about 30, 40 years ago. One of the types of taxes you wrote about, you called a solidarity tax. Explain what a solidarity tax is and how it has been successfully used.
Faiza Shaheen:
Sure. So a solidarity tax is something that has been used for some time that is often short term, that is built on a narrative of we’ve just gone through some hardship, or we are going through some hardship as a country, and we need to come together and have this kind of short term tax, often on the richest. It might be on wealth, it might be on corporations, it might be on income, in order to pay for interventions to support other groups. And the reason that we were thinking about it quite a lot in this project, because it was running over COVID, is that a number of our countries had started to look at a solidarity tax. So for instance, Uruguay put one in place. And we asked an academic to do some work looking at where it’d been used in the past, and it’d been used many places in Germany, after reunification in Japan, after the war, essentially to correct for inequalities that existed, and to also build a narrative of depending on each other, of needing each other, of giving back to society to make things fairer.
And I think that’s one of the things that really struck me about the solidarity tax, is that given the ways in which we have been individualized and the opposite narrative of, look after yourself and work hard and you deserve everything that you earn, all of those narratives built on many, many myths. The solidarity tax starts to take us in the other direction. I think in doing this work and working with governments around the world, it really struck me how much, often as policy thinkers, we’re not thinking about the politics and the communication plans around policies. And so we may want a longer term wealth tax, and that’s certainly what we should be doing, and that would help given wealth accumulation, but we have to take people on a bit of a journey. And so, how does a solidarity tax, especially in light of the pandemic and now the cost of living crisis, start making that argument for the rich giving back and getting people on board and moving us in a direction of a wealth tax.
So that’s, I think, some of the appeals of a solidarity tax. It gives us that language that we so need to build that sense of who owes what to society, and the social contracts that we need to reposition and rewrite.
Goldy:
And it’s as much about advancing a narrative as it is about raising revenue.
Faiza Shaheen:
Exactly. Exactly. So what’s the story about ourselves that we want to tell, and then what are the policies that help us do that? I think that’s why a solidarity tax did appeal at this particular point, although, one thing to say is that we’re running out of time on some of these things. Though we’re in a cost of living crisis now, a lot of research around tax and when you can introduce higher taxes is that you’ve got to have those moments. Timing is really important. And so it’s frustrating to not see that kind of move in many countries, although some countries have managed to do it, and they are sticking with it.
Goldy:
It’s frustrating how we on the left never seem to be able to take advantage of a crisis. And the other side always does.
Faiza Shaheen:
Yeah, even though there’s a huge amount of public support, actually. We did this public polling across eight of our countries, so it included from Canada and Sweden to Uruguay and Sierra Leone and Tunisia. And there was huge amounts of agreement across those populations about the need to, for instance, pay essential workers more. That was the most popular policy. Every country, over 80% of the population felt that that was necessary. And it’s frustrating that we don’t see the change that even people want to see.
Goldy:
I’m curious, in the data, were there high income countries who have reduced inequality over the past few decades?
Faiza Shaheen:
I guess, in terms of the top 20 countries, there were not high income countries that have managed to reduce inequality for the most part. For the most part, they’ve seen inequality increase. There was plenty of high income countries that have seen inequality increase over the last couple of decades, even countries that we think of as utopia countries in terms of equality. Norway, Sweden, New Zealand, they’ve all struggled with wealth accumulation at the top. But there are some countries, I wouldn’t want to take away some of the really good things that have happened, say on childcare policies and reducing gender inequalities in some of those countries. And I think the power and the drivers of inequality globally, and in particular, the financial system and wealth accumulation are so strong that even if some countries are not seeing huge levels of inequality or somehow` fighting to stand still, they tend to be doing some good things.
So I think there’s no perfect country, although there are some countries that you can look at and really see that they have built a consensus around addressing inequality, like Uruguay and Costa Rica and to some extent, Sierra Leone. I think some more provincial governments are doing some really good stuff, and some cities are also really trying to address this issue as much as they can within the powers that they have. So Scotland, Wales in the UK are doing much more because they have a political consensus to address inequality. In other places where there’s just no political will, i.e. England where we have Boris Johnson in charge, then it’s very, very difficult.
Goldy:
So let’s talk about Boris Johnson’s England and our United States here. If we put you in charge and you had no political constraints, what would be your top policy proposals?
Faiza Shaheen:
So, I guess I would start with a big green investment program, and one which meant that we’re not just building more renewable energy for instance, but that’s owned by local community. There’s this horrible statistic in the UK right now that of all the new wind turbines built, only one of them is owned by the UK government. I think the way in which green change is happening is actually concentrating wealth in a new way, and we need to break that. So a big green investment program, because that creates a lot of good jobs as well would be key.
A country like the UK, where you can borrow cheaply and the government can invest over a longer term, a universal childcare provision, I would say just pays off. It’s just a win, win, win. It’s a win for women. It’s a win for the labor market. It’s a win for children.
Goldy:
And the studies show that.
Faiza Shaheen:
100%. It’s a no brainer, really. So those two are really critical policies. And alongside that, just thinking about these three policy areas around visible change, solidarity building and securing credibility, I would certainly look at some mechanisms by which we could have a national conversation. I think just as we see in the US, with say discussions around abortion and stuff, we are a hugely polarized population and we’re starting… I mean, not even that we’re starting to, but a lot of hate that has come out. It’s very hard to build political consensus or even a nice place to live when there’s that much hate between groups. And I think ways of which to, say, emulate some of what Ireland did on the Citizens’ Assemblies, I would look at to just have that conversation to start rebuilding that trust in each other and across the country.
So that, to me, is something I would want to do around solidarity building. And then, we really have to change… I don’t know how much people listening to this show would’ve watched Parliament or seen UK Parliament. It’s so arcane and it’s so full of the same old people who ruled the country and the seas and the empire for centuries. There’s some real cultural change that needs to happen in Westminster to have some better representation of different groups. I would move Parliament out of London and out of that building and make it much more accessible for people. To me, it’s just so steeped in this old silliness, almost, of tradition that has not helped.
So some way to really fundamentally shift the way in which the parliamentary culture currently exists, and certainly proportional representation is something that we should have, because currently people vote and their vote often doesn’t mean anything. So yeah, those are just some things off the top of my head.
Goldy:
Yeah. Well, at least you don’t have a constitution standing in your way.
Faiza Shaheen:
Yeah.
Goldy:
Fundamental changes here are nearly impossible.
Faiza Shaheen:
Yeah. But I mean, if you’ve got a history steeped in the kind of pompous elitism that the UK has and colonial history that it sticks to, it’s still very, very hard to fight the establishment. And that’s the problem in so many places. And then it always just comes back to how we build movements to counter that.
Goldy:
Okay. So despite all these obstacles, are you optimistic that we can address this issue?
Faiza Shaheen:
I think one thing I’ve really been inspired by in this work looking abroad is that no, I haven’t found the perfect country or the perfect leader, but that there are good people trying to do good things. And it is possible, when you have that vital ingredient of political will. Change is possible. Change is actually possible. And so, I’m hopeful in that sense that it’s not impossible, but I also do, like most people, have those moments where I think, gosh, where do we go from here? Especially somewhere like the UK, where we’ve had a conservative government for so long, and it doesn’t feel like that’s going to come to end anytime soon. And when we did have a more expressly progressive Labour Party, it really struggled, if I can put it that way, and then didn’t do well in the end.
Goldy:
Well, there’s no shame tilting at windmills, even if it feels a little quixotic, it’s better to fight the fight than to give up.
Faiza Shaheen:
Exactly. I don’t think we have a choice to give up, really. Given everything that’s happening and the multiple challenges that we face, there is only one option and that is to fight.
Goldy:
Well, maybe you’ve just answered it, but I’ll give you our final question, which is why do you do this work?
Faiza Shaheen:
Yeah. It started from a very young age for me. I think I just saw a lot of injustices and just felt very angry about things. And I grew up in a working class family. My dad was a car mechanic, but I managed to get into the University of Oxford and then was totally exposed to the Boris Johnsons of this world, and felt very, very angry and very sad about the human potential that is wasted when you have such inequalities. And my mom was Pakistani, my dad from Fiji, and you can see it definitely in Pakistan as well, where people can have so much talent, but because of inequality, they’re kept in their place and they have a lot of hardship. So yeah, it comes from a very personal place for me. Inequality is injustice for me, so I can’t imagine really doing anything else.
Goldy:
Well, thanks for doing it, keeping up the fight.
Faiza Shaheen:
Yeah. Thank you. And as well, there are so many people fighting this fight now.
Goldy:
Yeah. And I think it’s possible. I’m a born pessimist. Short term, I always expect the worst to happen, but I wouldn’t be doing this if I didn’t think there was an opportunity to win.
Faiza Shaheen:
I think there is something about the community that you can build around you and knowing other people that are doing similar things that can keep you going. And also, we’re right. We’re right.
Goldy:
Yeah.
Faiza Shaheen:
We are right.
Goldy:
There’s some solace in that. But keep up the good work and keep the focus on narrative, because I think a lot of folks on our side lose sight, how important storytelling is to winning these battles.
Faiza Shaheen:
Absolutely. I’m surrounded so often with academics that are just thinking through some of the technical design and I’m like, you’ve got to be able to sell this to people. And if you’ve never done it, people listening to this that care about inequality, go at some political campaign for a candidate that you care about. Go and knock on doors and it will make you realize how important storytelling and narrative is. Just rationally explaining things with statistics does not work. You’ve got to put your heart into it. And that is a really, really big part of the story.
Goldy:
Right. Stories shape the world.
Speaker 3:
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