Income and Health Endnote

It is often suggested that just changing people’s incomes is not enough to improve their health. While we acknowledge that there are numerous other ways of improving health, we would emphasise that the evidence does show that more equal income distribution is enough on its own to have a major impact on health. Indeed, evidence from the Health and Lifestyles Survey suggests that poor people who adopt ‘healthy’ behaviour (good diet, exercise, not smoking) benefit their health less than the relatively well-off who adopt the same behaviour.

Nor do we want to suggest that it is not worth improving people’s housing or other aspects of their material circumstances – indeed adding to income is in many cases one of the more effective ways of achieving such objectives. But because income distribution is much more important than absolute income, the implication is clearly that health is no longer determined primarily by the direct physical impact of our material circumstances. Instead, it seems to be a matter of how our circumstances compare with those of others – influencing our self-esteem, our ability to manage in an affluent world and our relations with others. Dealing directly with this inequality is the most effective way we know to improve health.

We have argued that improving the tax/benefit system presents the best opportunity for immediate and significant moves in this direction. This should therefore be the primary focus of activity within the public health field. But, in the longer term, the distribution of original incomes needs similar attention. For the vast majority of the population, access to stable employment in a reasonably paid job offers the best security against poverty both during working life and retirement. Maximising the opportunities for such employment is an important part of any move towards greater equality – though it is worth remembering that it leaves the issue of supporting those in unpaid work to be addressed.

The creation of a society that can offer full employment of a suitable kind is a task that is only partly within the government’s control. Macro-economic pressures often push government policies off-course. Increasingly international investment patterns, the impact on the West of changes in Eastern Europe, the apparent tendency of Western workers to polarise into a ‘core’ and a ‘peripheral’ workforce, suggest a changed economic order in which governments may find themselves with neither the knowledge nor the power to control their economies as they would wish. Demographic pressures are another major factor. The predicted increase in the dependency ratio seems likely to put workers in a stronger position than they have been for some years. OPCS population projections suggest that between 1985 and 2000 the number of children under 16 will increase by 8%, people aged 65 and over by 7% and 85 and over by 70% whereas the working population, defined as those aged l6-64, will increase by less than 2%.

This broader background will do much to determine the effectiveness of specific policies that may be implemented. One of the most crucial areas for action is low pay. This is a long standing problem. In 1982 the Department of Employment pointed out that the distribution of manual mens earnings had remained roughly constant for a century. The poorest workers were worse off, relative to the rest of the population, than they were in the 1880s. In all, more than nine million workers, full and part-time – 44% of the adult workforce earn below two-thirds of the median wage for the basic hours they work. Two out of three of these are women, and members of ethnic minorities are over-represented. Low pay is increasing with Government policies to reduce employment rights, continuing unemployment and the fragmentation of the workforce.

One action within the Government’s power is the introduction of a minimum wage. Britain is the only country in the EC without one, and the idea is increasingly widely accepted, though there is still concern from some quarters about the effect on employment levels. The Labour Party is committed to the introduction of a minimum wage fixed at fifty percent of the adult average wage (pro rata for part-timers) moving to two-thirds of the median wage.” The payment of benefits to those also earning, such as Family Credit or social dividend proposals, adds to the case for a minimum wage. Without it, there is a risk that benefits could merely enable employers to offer lower wages in the knowledge that they would be topped up.

Reducing pay differentials across the spectrum is also of importance. The pattern of union wage claims and attitudes to differentials, as well as government pay policies, may have an effect. In addition, it would seem plausible that a high degree of hierarchical differentiation within the workplace would go hand in hand with increased income differentials. Japan has a comparatively egalitarian income distribution and restricted workplace hierarchies. Reducing hierarchy in the workplace might benefit income distribution and also, perhaps, have more direct benefits to workplace relations and self esteem.

Access to good quality employment is most limited for those in our society discriminated against in other ways – women, particularly when bringing up children, people with disabilities, carers and members of ethnic minorities. Many of the remedies are well-discussed – improved childcare, improved opportunity and protection for part-time workers, effective anti-discrimination legislation, quotas and good practice policies, increased training and education as well as an income support structure that makes working worth-while – these are just the beginning of the list. The Government also has considerable influence through regional policies to reduce the phenomenon of whole communities and regions of deprivation that come about from the knock-on effects of high unemployment. But although some of these policies – training, for example – may perhaps have an effect on the number of jobs available, in general it is hard to avoid the conclusion that the success of such strategies will be highly dependent on the overall economic and demographic trends influencing demand for labour. This re-emphasises the point that, important though original incomes are in the long term, in the short term aiming at redistribution through taxes and benefits is a safer strategy.

We said earlier that life is short where its quality is poor, and in many respects health is a good indicator of differences in the quality of life both within and between societies. Too often the material standard of living is regarded as synonymous with the quality of life and income is assumed to be its best measure. But indices of real income are unable to come to grips with the all-important qualitative changes in our way of life and are obliged to summarise all change as if it were a purely quantitative process. They cannot even take account of the qualitative changes in the material goods and services we consume. Health, on the other hand, is sensitive not only to both qualitative and quantitative changes in material life but also to its crucial psychological and social components. Modern standards of consumption have reached a point where improving the distribution of what is produced is very much more important than further increasing its quantity. What is produced must be used more effectively to serve human goals.

The reduction of income differentials and relative poverty are important enough objectives in terms of social justice alone. Their role as determinants of the population’s health adds to its urgency. If these health effects are also indicative of the changes which need to be made in order to improve the quality of life and human happiness in society as a whole, they must not be ignored.