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Dealing with inequality of opportunities: Why it matters, and what can we do?

Dealing with inequality of opportunities: Why it matters, and what can we do?

I often argue that the current level of inequality is a problem regardless of where we are in the income distribution. Subsequently, I  welcome any project that aims to solve the problem, by first of all dealing with the underlying issues,-projects such as those that stipulate more investment in human capital (education) (eg: initiatives like Educating All). Here is why:

In a market-based economy, (income) inequality is not a problem per se. A certain level is not only inevitable but also desirable as it gives people the incentives to work hard, to study or to take risks and innovate. Inequality may be just a consequence of our preferences about leisure and consumption or the result of our choices about lifestyle in general. However, sometimes this is not the case, as some people cannot choose to do extra classes, to go to private schools or simply don’t have the same social capital/connections to get into certain positions. A good project dealing with inequality of any kind addresses the big issue underneath: the inequality of opportunities caused by the accident of birth: being born in a poor country or family, being part of a minority, or having a certain gender or race. This inequality of opportunities makes them less productive over time, although their qualities and potential are indeed the same.

It is hard to argue that the current level of income inequality does not result in inequalities of opportunities to a large extent.

As a short context, the UK has a high level of inequality compared to other developed countries. In 2015, the GINI Index was .36, with .04 points above the OECD average. The UK is the 2nd most unequal country in the G7 with only the USA having a higher GINI Coefficient.  Moreover, in the early 1980s, the GINI Coefficient in the UK was about 0.26. Inequality increased in the last decades.

One problem with this level is that it fuels inequality of opportunities. One indirect measurement of this is the level of intergenerational elasticity, the percentage of second generation income difference that is attributable to first generation’s income disparity. In 2006, the UK had an elasticity of 0.5, meaning that a 20% rise in parents’ income gives a 10% rise in their child’s future income. More evidence is brought by educational attainments, as presented by my fellow ambassadors and the fact that certain groups do consistently worse than others in university and this is caused by differences in other factors, but not IQ. Some people do worse just because there was less invested in them, maybe they didn’t have the money to go to a private school and have the best teachers or their environment/money challenges affected their behaviour. And this is not an exhaustive list.

Why should I care? Equality of opportunities is important for intrinsic reasons: one cannot choose the family they are born into and should not be rewarded/ punished for something they have not done. Secondly, for instrumental reasons: a society will not work efficiently if the brightest people are not allocated the best positions. To borrow an example from Ethics imagine some talented musicians that get to play at a deaf violin and some others that play at some very good instruments, although they are not as talented. If one had a wedding the probability is that he would invite a majority from the latter because the end-product (music) sounds better. Nevertheless, this decision makes sense for her but as a society, it doesn’t: the best wedding music is not produced, as the potential of some good musicians is not taken advantage of. This is why the best artists should get to play the best instruments and this is why we need equality of opportunities, so we know who is the best artist (has the greatest ability, by giving the same education) and give her the best instruments (the most suitable work opportunities/positions in the society). As a result, we would enjoy the best music that can be made (best economic and social outcomes for our society).

Following the line of thinking suggested by Harvard philosopher Michael Sandel “If the only advantage of affluence were the ability to afford yachts, sports cars, and fancy vacations, inequalities of income and wealth would matter less than they do today “.However, in our societies inequality affects directly human capital and development. If we can’t reduce inequality, at least we can make it limit to “yachts and sports cars” and not opportunities, because the latter directly affects us all.

-A student Ambassador

[1] The Gini Index is a measure of inequality distribution that takes the value 0 when there is perfect equality and 1 when one individual has all the income/wealth. In this case, the phrase is about the Gini Coefficient after taxes and transfers.

Studying Fine Art at Manchester School of Art.

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