The British government’s recent mini-budget has been widely criticized. The effect on stock markets, pensions and the value of the pound has hardly been out of the news. As a clinical psychologist, one issue I find troubling, but barely talked about, is the potential effect it will have on the mental health of the British public. I am particularly concerned about lowering the top tax rate, what this will do to income inequality and what this will do to people’s mental health.
Reducing the basic income tax rate from 20% to 19% will have a very minimal effect on low and middle earners – save on average £170 a year for 31 million people. But by abolishing the top tax rate of 45% for those earning £150,000 or more, the very wealthy will have much more money.
Those who make a million a year will save over £55,000 a year from April 2023. Considering the average (median) UK salary for full-time workers is: £31,461 (before taxes, pensions and social insurance are deducted), this is a large benefit for top earners and a minimal one for low earners at a time of record inflation and soaring energy bills.
Regardless of your take on the evidence for trickle-down economics, you need to know what the research says about the impact of income inequality on health. the spirit levela book published in 2009 by British economists Kate Pickett and Richard Wilkinson shows that for developed countries, a wider gap between rich and poor has a huge effect on things like obesity, infant mortality, prison sentences and murder rates.
Countries with lower levels of inequality, such as Japan and Spain, tend to have lower levels of these problems. Countries with higher levels of inequality, such as the UK and US, tend to have much higher rates.
This relationship also exists for mental health. The figure below, from the book, shows this link and paints a grim picture.
The relationship between the level of income inequality and the percentage of the population with a mental illness
A Study of the World Health Organization of 65 countries found that developed countries with a greater Gini index (an economic measure of income inequality) had more depression over the course of a year, taking into account demographic variables such as age and education level. The most unequal countries had a more than 50% higher prevalence of depression compared to the most equal countries.
Of course it’s not because two things are related that one causes the other, but a review concluded that it does strong evidence for a causal relationship between income inequality and health. For example, changes in income distribution predict later changes in public health, not the other way around.
The difference between rich and poor in the UK is steadily increasing since the late 1970s, although it fell slightly in 2021. At a time of record inflation and stagnant wages, the poor are getting much poorer. But the rich are getting richer, and pay for CEOs of the UK’s top 100 companies is increasing 39% in 2021. The latest budget will widen the gap between rich and poor. Add to that the fact that a recession is forecast, which is likely to happen deteriorating mental healthdebt levels are likely to increase and people with mental health problems are more than three times more likely to unsecured debts such as utility bills or credit cardsand it is clear who will bear the mental health burden of the cost of living crisis and the latest budget.
New method of measuring economic inequality could improve policy outcomes
Quote: Mental health in the UK is about to get worse, and inequality will have a lot to do with it (2022, September 30) retrieved September 30, 2022 from https://phys.org/news/2022-09-mental -health -uk-worse-inequality.html
This document is copyrighted. Other than fair dealing for personal study or research, nothing may be reproduced without written permission. The content is provided for informational purposes only.