American Economy, Social Justice Index

What do you see here?

There has been no shortage of headlines this week about the growing income and wealth inequality in the United States. A new study from the Congressional Budget Office, for example, found that income of the top 1 percent of households increased by 275 percent in the 30-year period ending in 2007. American households at the bottom and in the middle, meanwhile, saw income growth of just 18 to 40 percent over the same period

But less attention has been paid to the fact that not only are the numbers bad in America, they’re particularly bad when compared to other developed nations.

A new report (.pdf) by the Bertelsmann Foundation drives this point home. The German think tank used a set of policy analyses to create a Social Justice Index of 31 developed nations in the Organisation for Economic Co-operation and Development (OECD). The United States came in a dismal 27th in the rankings. Here, for example, is a graph of one of the metrics, child poverty, in which the U.S. ranked fourth-to-last.

The U.S. ranks 27 out of 31 in your Social Justice Index, clustered around countries like Turkey and Slovakia. If we have the biggest economy in the world, why are we so low in this index?

Social justice does not depend solely on a nation’s wealth or its economic prosperity. Social justice is about creating equal opportunities for every individual. It is thus decisive that the right priorities are set in a number of policy fields. We have tried to measure the degree of social justice in each OECD country by looking at six key factors: poverty prevention, access to education, labor market inclusion, social cohesion and non-discrimination, health, as well as what we call “intergenerational justice.” The U.S. receives particularly low scores in the area of poverty prevention. Income poverty afflicts 17.3 percent of all Americans, including 22.2 percent of the elderly and 21.6 percent of children.

We argue that the prevention of poverty is a fundamental precondition for social justice, so it is weighted most strongly in the overall ranking. Under conditions of poverty, social participation is possible only with great difficulty. The United States’ low score in poverty prevention is one of the reasons why the U.S. is so low in the overall ranking. But there are also problems in some other areas — education, for instance. The impact of a student’s socioeconomic background on his or her educational success is significant in the U.S.. This also undermines the idea of equal opportunity.