Wealth inequality, or the uneven distribution of financial assets among citizens, is a subject that has gained significant traction as of late. Following the Occupy movement and the publication of Thomas Pickety’s best-selling “Capital in the Twenty-First Century,” it is not only fraught over within academia, but also now figures prominently in the public discourse. The concern underpinning it is clear: equality of opportunity is on the decline in much of the Western world. Richard Wilkinson, a British professor of social epidemiology, recently stated on PBS NewsHour,
“If you want to live the American dream, you should move to Finland or Denmark, which have much higher social mobility.”
The drivers and determinants of wealth inequality are broad, ranging from capital accumulation to globalization to technological development — to name only a few. Most of these drivers are of the kind that the average Occupy movement activist would unabashedly protest. Others, however, fall within a class that might disincline some from outright protestation.
Lawrence Solomon, a Canadian journalist, postulates that the feminist movement and the resultant emancipation of women have had adverse effects on wealth equality. His argument goes that the full integration of women into post-secondary education and subsequently into higher-earning jobs has had the side effect of promoting “educationally assortative mating.” This means that where formerly couples were often comprised of one high-income earner (the male) and one lower-income earner (the female), increasingly mating is occurring within same socio-economic strata – effectively pooling their incomes. In other words, where doctors used to marry nurses, they are increasingly marrying other doctors. The effects that this has on wealth inequality are two-fold; rich couples get richer, and poor couples get poorer.
Given these findings, Solomon suggests that the rise of wealth inequality – as attributed to the emancipation of women – is the lesser of two evils and should therefore be accepted. But does the emancipation of women necessarily and independently have the effect of driving wealth inequality? Or, alternatively, is this a distorted statement, wrapped in good will to subdue his audience into accepting an unequal society? A comparative analysis of wealth inequality and educationally assortative marriages in North America and the Nordic countries suggest the latter is true.
To compare inequality over time, or across regions, the standard measure used is the Gini coefficient. This measures statistical dispersion: a coefficient of zero expresses perfect equality, whereas a coefficient of one expresses maximal inequality. Nordic countries have an average Gini coefficient of 0.254 (a very equal society), compared to an average of .3345 in North America (a less equal society).
When we consider that both North America and the Nordic countries have comparable levels of educational homogamy (the amount of coupling occurring within the same level of educational attainment; averaging 54.5 per cent in North America and 54.35 per cent in the Nordic countries, when excluding the outlier of Iceland) we may be inclined to dismiss Solomon’s assertion that educational homogamy is a determinant of inequality.
However, it would be more accurate to contend that while educational homogamy does have statistically significant effects on wealth equality in the North American context, the relationship between educational homogamy and wealth inequality is dwarfed by mitigating factors in the Nordic countries – namely, by social democratic welfare state regimes. These regimes are marked by an active commitment to the principles of equality of opportunity, equitable distribution of wealth, and public responsibility for those unable to avail themselves of the minimal provisions for a good life. One of the benefits of such arrangements is that the high taxation of higher earners undermines the magnitude of educational homogamy’s effect on income inequality. Moreover, the presence of greater social security also serves to undermine the importance of status consideration in partner selection. This allows individuals to seek out marriages for other reasons — such as love.
Such policy arrangements are in stark contrast to those in place in North America, as attributed to the decline of Canada’s welfare state since the 1970s, during which time Canadian labour unions peaked at 35 percent of the workforce. What followed was a period of market stagnation and rising international competition; and private profits, investment and job creation all declined. Safety programs engineered for the welfare state came to be viewed as too expensive, and as undermining both labor discipline and capital competitiveness. In response, corporations mobilized and invested large sums into subverting the direction of the Canadian political discourse. This was achieved primarily through the creation of corporately-funded think tanks like the Fraser Institute, and through the execution of mass-political multimedia campaigns. Following the additional recommendation from the OECD, the Canadian government shifted its approach to policies that favoured corporate interests.
In particular, these shifts took the forms of: tax cuts for the rich; privatizing state assets; deregulating labour; and reducing social security. The 2012 annual report by the UN Conference on Trade and Development should have been an obituary for the neoliberal model, showing that it has been universally ineffective in fostering sustainable economic growth (while having been a major contributor to inequality). In particular, neoliberalism provided a context conducive to both high unemployment and large wage gaps, therefore contributing to wealth disparity. There has been a growing disenchantment with its principles since the 1990s, and many claim that it has reached its experimental limits.
In view of this and of Lawrence Solomon’s proposed course of action, we may wish to rebut that indeed, the emancipation of women has made society as a whole richer. However, this advancement certainly does not requisite that an unequal society be derived from it. Inequality was never an inevitable consequence of the emancipation of women; rather, it is an inevitable consequence of the neoliberal paradigm that currently underpin Canadian public policy. Perfectly generalizable policy models exist that demonstrate — such as in the Nordic case — how we can successfully balance the goals of elevating women, while achieving desirable levels of wealth equality.
Shane Senécal-Tremblay is a graduate student at the University of Toronto, School of Public Policy & Governance. His research interests include social and economic inequality, development economics, constitutional law, and global governance’s role in the international insurance of human rights. Shane will be spending his summer interning at the United Nations, Office of the High Commissioner for Human Rights, in Geneva, Switzerland.