Almost absent were studies explicitly linking income inequality to these psychological states in whole societies.
However, new studies have now filled that gap. That inequality damages family life is shown by higher rates of child abuse, and increased status competition is likely to explain the higher rates of bullying confirmed in schools in more unequal countries.
We showed that mental illnesses are more prevalent in more unequal societies: This has now been confirmed by more specific studies of depression and schizophrenia, as well as by evidence that your income ranking is a better predictor of developing illness than your absolute income.
Strengthening community life is hampered by the difficulty of breaking the social ice between people, but greater inequality amplifies the impression that some people are worth so much more than others, making us all more anxious about how we are seen.
Some are so overcome by lack of confidence and social anxiety that social contact becomes an ordeal. Others try to enhance self-presentation and how they appear to others. US data also show that narcissism increased in line with inequality.
The economic effects of inequality have also gained more attention. Research has shown that greater inequality leads to shorter spells of economic expansion and more frequent and severe boom-and-bust cycles.
The IMF suggests that reducing inequality and bolstering longer-term economic growth may be “two sides of the same coin.” And development experts point out how inequality compromises poverty reduction.
Lastly, inequality is being taken up as an environmental issue; because it drives status competition, it intensifies consumerism and adds to debt.
In Britain, one of the few signs of real progress are the fairness commissions set up by local government in many cities to recommend ways of reducing inequalities. As a result, many local authorities and companies now pay the living wage.
However, at the national level, the UK’s coalition government has failed to reverse the continuing tendency for the richest 1 percent to get richer faster than the rest of society.
The UK Equality Trust, which works to reduce income inequality in order to improve the quality of life in the UK, calculates that the richest 100 people in Britain now have as much wealth as the poorest 30 percent of households. The top-to-bottom pay ratios of about 300:1 in the FTSE 100 companies is not diminishing.