Inequality is making your life worse too

Five ways inequality is making life worse for everyone.

If you’re doing okay for yourself, you might think that the current high levels of inequality don’t affect you. But here are five ways in which it is making your life worse.

Inequality affects our mental health. While it triggers self-esteem issues in those worse off, it also increases “status anxiety” in everyone else, in which we worry about our position. To deal with this anxiety, we consume more: designer clothes, flashier cars, bigger houses, exotic holidays, etc, and work overtime to pay for all of this. As a result, household debt levels rise, and it takes us longer to pay off our mortgage.

Inequality reduces our social circles, which is one of the most significant variables in happiness, because it is harder to maintain friendships across class differences. For example, we risk making friends feel uncomfortable, which can make conversation more difficult. Or maybe you want to go to a nice restaurant, but know your friends don’t have as much disposable income, forcing you to choose between the two.

Inequality increases addictive behaviours, including alcohol consumption and substance use, but also includes behaviours such as shopping or gambling. This happens at all levels of society, i.e., we become more vulnerable to these.

Inequality increases public spending costs. It creates an increased mental health burden (more NHS spending) and the number of people too ill to work (more benefit claimants). It is estimated that the UK could save £39 billion per year just by avoiding the problems inequality causes. That’s more public debt and less money for things we want the government to fund.

Inequality increases crime. We pay for this directly when our houses are burgled, our bikes are stolen, etc, through the increased costs of alarms and security systems, and mentally in the increased fear of being a victim of crime. We also pay for this indirectly: when shoplifting increases, businesses factor the losses into their prices, resulting in more expensive goods, such as groceries, as well as increased public spending on policing, courts, and prisons.

Reducing inequality sounds like it would cost us a lot of money. But it doesn’t. It reduces both public spending and the need to consume to manage our status anxiety, meaning those of us who are well off can spend less, work less, and enjoy greater wellbeing. We all gain from reducing inequality.