The Impact Of Inequality On Non-Economic Aspects Of Development

How does inequality affect non-economic aspects of development (social capital, wellbeing, happiness. 

Social capital

This essay discusses various issues of inequality in the society. There are many facets of inequality which emerge from the uneven distribution of resources, through the norms of allocation which engender the specific patterns along the lines of socially defined categories of people. Inequality also refers to the differentiation penchants of the accession of social goods. The factors of inequity revolve round the aspects that are brought about by the gap associated with power, prestige, kinship, gender, age, ethnicity and religion. In addition to this, source along with the amount of income freedom of speech, access to the health care policies, education are the states through which the differentiation can be judged (Rothstein & Uslaner, 2005). Inequality in any aspect has become a deeply rooted feature of the social and economic sceneries. It is such a ban for t humanity that has proven stubbornly resistant to attempted remedies. The inequality factors involve both economic as well as non-economic facets such as social and cultural differences. These aspects fuel the trait of discrimination that ultimately affect wellbeing of the people of the country. Beside this, the inequality problems create differentiation among the citizens that lead to improper distribution of power, privileges, opportunities and participation in improving the country’s social capital.  This essay discusses the deep-rooted impact of inequality in the non-economic aspects such as social capital, well-being of the communities and happiness among the people of the society.

Social capital: it is a type of cultural as well as economic capital that is closely linked with the social networks function centrally. Social capital is used for explaining the upgraded performance of different groups, high managerial performance and growth of the entrepreneurial corporations that regulate the evolution of the communities by producing public goods for common good. Social capital involves cultural capital, human capital, social capital which aim to build mechanisms for changing the lives of the individuals, and all-encompassing well-being of the communities. According to Lin (2000), the concept of social capital can be defined as proper investment and usage of embedded resources in the social relations for expected returns. It chiefly depends upon two factors associated with quality or quantity of the resources that the individuals or groups access and use. This concept emphasis on the resources which remain embedded in the social relation of the resources. Secondly the location of the resources in social network is also very important to enhance the likelihood of the instrumental returns for example better jobs, high earnings, bonus, promotions, recognition and most importantly the expressive returns in terms of good mental health. The strength of the network leads to achievement of better social resources. 

The theory of social capital

The theory of social capital emphasizes that the capacity of exploring or building social capital and proper exploitation of the social resources are not always the same in all the social groups. Sometimes, only acquirement of social resources may not lead to the proper reception of expected returns. This is one of the chief reasons of increasing inequality in the societal setting. The inequality in different types of capital, such as human capital and social capital leads to the conflict in the society. As the social capital theory discusses that the historical and organizational constructs have direct impact on the creation of inequality among the social classes (Hero, 2003). There are some chief factors which ignite the issue of inequality that are mainly associated with gender, age, race, class, ethnicity, culture and religion. In one hand the common aspects bring together the groups that share similarities among them and create scope for the conflict among the gainers and the deprives. As the Marxist view of society states that there are two classes exist in the society and the economic gap is the main reason of inequality. This heterogeneity leads to the groupings of the labor class who are deprived of the necessary social resources. The discrepancy of capital employment leads to broadening of gaps between the sections present in the society. The principal explanation shared by the various capital theories posit that investment along with mobilization of investment can enhance the desirable results to the individuals or the communities.

As mentioned before, the social inequalities largely depend upon the actors like gender, race and ethnicity. In determining the location of the social networks, the resources of the social actors like individuals, teams and communities have great importance. Hence there is a great disparity in this field related to gender (Colombo, Franzoni & Rossi?Lamastra, 2015). For instance, the male workers of the company have more resources in compared to the female workers. The networks of male employees are consisted of both in and non-kin resources like co-workers, neighbors, friends and advisors. These networks are vast in number but are chiefly regulated by the variables associated with wage, employment and family (Cleaver, 2005). On the other hand, the women have more kin networks than non-kin networks hence have networks of better quality. This is how the inequality assists in the prosperity as well as diversity of networks. In the aspect of gender iniquity for interesting network diversity, it can be stated that the men employees are more adapt to the organizations related to the economic and financial affairs whereas the women are attached in the peripheral systems which focus on the domestic as well as community affairs (Aldrich & Meyer, 2015). Men employees’ positions in the voluntary network are much focused to provide access to the information about business opportunities, possible jobs and probabilities for professional achievements. 

Gender and social networks

In dealing with the inequalities in racial level it is seen that the discourse as well as uniformity of behavior along with network are upheld by interaction on both the national as well as local levels of the members of different racial communities. In dealing with the inequalities, these socially backward people face problems (Lins, Servaes & Tamayo, 2017). Despite the fact that they have access to the social care opportunities through various non-governmental organizations, churches and governmental agencies but the issue of chronic poverty is always present there. However, they get scopes for education and a lot of opportunities, they are the most suffering class (Salloum, Goddard & Larsen, 2017). There are the behavioral, ethnic, linguistic and other cultural differences which create barrier for all-encompassing growth of the under developed communities (Hobdari, Sun & Goodstein, 2016). Some of the critics argue that the impact of inequality is beneficial for these traditional communities because social capital influences the results of such deprived livelihoods which are capable for expanding chances as well as choices for improving the poverty status. However, in the aspect of race and ethnicity, it is found out that the socially deprived people tend to have kin networks which are more associated with the local ties, family and neighbors (Dubos, 2017). Community plays a vital role in their systems hence these people use ethnic ties for accessing resources. This is the reason why the investment and expected returns are much lesser than the common people of a nation in spite of gaining more support from the government.

Wellbeing: wellbeing is a general term associated with the condition of individual group. It depends on the positivity in the diverse as well as interconnected dimensions. These dimensions include the social, psychological and physical wellness which extend beyond the mere traditional definition of health. This concept of well-being also includes the choices and activities aimed at gaining mental and physical vitality and social satisfaction. It is the sense of accomplishment and private fulfilment. As mentioned before, the matter of inequality has a far reaching effect on the social life of the people which ultimately influence their overall well-being. There can be differences in the geography as well as development but all the countries have one unique similarity that is related with inequality (Kim, Kee & Lee, 2015). This has become the more most vital feature of the social and economic landscape pf different countries and affecting both positively and negatively in the wellbeing of the people, of the countries.  This is the reason why this matter is gaining ground in the national development affairs where reduction of income inequalities across their population is one of the most important agenda of most of the national governments in today’s world. High inequality ratio implies a huge concentration of individuals either at the top or at the bottom of the equal distribution of social capitals. This social and economic setting of the countries thereby digging out a middle-income group in each of the counties. Social inequalities create social tensions by hampering the wellness in all types of societies that result in the political instability along with major social conflicts. 

Inequalities in racial level

The effect of inequality has invidious consequence in the concept of wellbeing. Her are very few matters lie the idea of social well-being that spans both micro and macro phases. Social inequalities hamper the confidence of the people when they see that they are at the bottom of the opportunity ladder. In discussing the issues of wellbeing, the critics have analyzed the data published by Sustainable Economic Development Assessment (SEDA). According to this report published by SEDA there are ten dimension to understand the factors affecting the well-being of the people of the countries (see figure 1.). First of all, there is the economic factor relating to income which is the chief reason of social inequality (Weforum.org 2018). Wellbeing is also related to the unemployment factor if the country has high unemployment rate, then the well-being of the people is not served properly.

Figure 1. Ten dimension of wellbeing (source: Weforum.org 2018)

As mentioned before the main issue of inequality is inequality of income which strangely increases the gap between the income of populations in lower as well as average income. This ten dimensional theory by SEDA, explores whether the issue of inequality has detrimental impact on the average well-being levels. Based on this report the critics have found the income inequality is certainly a drag on the conversion of wealth to well-being of the citizens. These inequality relating to unemployment, low GDP growth of the country, in turn, lead to reduction of accessing the key aspects of well-being which include good education system provided by the government of the country and effective healthcare system.

The concept of inclusive growth that encompasses the overall satisfaction of people of a country regarding infrastructure, health and education, political stability and security to access the fundamental rights, completely depended on the equilibrium present in the social setting. Proper socio-economic distribution id the chief aim of the governments today where there is a sustainable development strategies applied in the policies of the welfare state. In discussing the barriers of achieving wellbeing in the society, the racial, gender and cultural inequalities play major role (Purcell et al., 2016). The development of the society focuses on the welfare of all the people of the country where there is no discrimination in the basis of age, skin color, culture, race, language and gender. In this case, the factors which aim to create discrimination among the people need to be barred from flourishing. On the other hand, the social norms which facilitate the interest of the deprived people become the cause of communal dissatisfaction among the common people of the country. Due to globalization, the incorporation of technology in the organization has been increasing. This has been resulting in the enhancement of unemployment as the technologies are replacing human force in the companies. Therefore, maintaining the overall wellbeing of the country has become impossible for the governments. Hence these varieties are the contributing factors of inequalities thereby disruption in the social structure as well as intension of the welfare state.

Wellbeing

Happiness: Happiness is often thought to be characterized by the economic gains and the enhanced lifestyle of the people. However, in certain cases the monetary gains and the materialistic approaches do not affect the happiness of the individuals.  According to Hurst, Gibbon and Nurse (2016) the different aspects of the happiness is based on the inequality that is being faced by the people in the nation. The different aspects of the change in the systems and the culture of the nation affect the livelihood of the people. The major aspects of the change in the society in the individual levels have affected the livelihood of the people and the happiness. Raising the incomes of the people might help them in improving their lifestyle and their standard of living, as they are able to afford the luxurious goods available in the market. 

The different aspects of the change in the political structure have affected the happiness of the people. Inequality in the society and the social norms that are being implemented on the suppressed classes of the society has resulted to the insecurity among the communities. It has affected the happiness of the people living in the society. Zagorski et al.  (2014) stated that the proper understanding of the different aspects of happiness is characterized by the inequality that rages in the society.  The analysis that is being undertaken by the author has helped in illustrating the paradox of happiness, where striking differences are found in the left-wingers of Europe and that of US based on the inequality. The inequality in the society has affected the wellbeing of the people, which is not characterized by the economy. The most intriguing feature that affects the understanding of the different aspects of the inequality is based on the suppression that is faced by the communities irrespective of the economic background. Easterlin (1995) stated in the study that the understanding of the different paradox elements has helped in the understanding of the different concepts happiness and the manner in which it is related to the inequality in the society.  

In Europe, the racism is relatively low which is due to its indulgence with the EU where the happiness index of the nations, which are incorporated in the union, is being jointly administered (Goldthorpe, 2017). The average of the happiness index is being constituted in that case; whereas the US incorporates the index of their own. On the other hand, the government has aided to the racism in US, which has helped the nation in gaining an advantage on the index over Europe. It has helped in determining the different aspects of the change in the structure of the politics that affects the index (Ferrer?i?Carbonell  & Ramos,  2014).

The different social norms help in the understanding of happiness at the micro level. At the macro level, the individuals determine the proper functioning of the society based on the ventures made by the same. The social evil, inequality and suppression have affected the livelihood of the individuals, which has affected their happiness. At certain levels, the weak and the suppressed classes of the society might feel insecure of extinction of their race and thereby affect their happiness.  The Satisfaction theory has helped in the understanding of the different aspects of the happiness that affects the emotions of the people. On the other hand, the Hedonism theory expresses the view of relating ones happiness with ones issues and pains (People.hbs.edu., 2018). However, as per the requirements of the evaluation of the case, both of the theories are applicable, as it would be helping in the proper understanding of the different aspects of the happiness and the manner in which inequality in the society affects the happiness of the people.

The inequality among the people and the racism has affected the proper understanding of the different factors that helps in the determining the happy faces of the people living in the communities. The paradox situation that is being observed relating to the inverse relation of happiness with the economic growth of the nation is known as the Easterlin Paradox, named after economist Richard Easterlin. It has helped in understanding the different aspects through which the inequality has affected the wellbeing of the people resulting to the loss of happiness. According to a research by Bjørnskov et al., (2013), the improvement in the GDP does not affect the happiness of the people living in the region more than the factor of inequality does to the communities. In certain cases, the inequality in the society has affected the health and the wellbeing of the people, which is not characterized by the economic growth of the nation in the international market.    

Conclusion

Therefore, from the above discussion it can be stated that the proper understanding of the inequality in the society has affected the wellbeing, social capital and the happiness of the individuals living in the society. The wellbeing of the people is characterized by the facilities and the practices that are undertaken by the government agencies to bring in changes in the social systems. On the other hand, the proper identification of the factors of the social capital has helped in determining the different factors of the change in the society based on the effects of inequality.  On the other hand, the happiness of the inhabitants of the nations is based on the holistic view of the satisfaction, which is based on the matter of inequality in the society. The different aspects of the change in the society are based on the understanding of the different factors that helps in maintaining the paradigm of the same. The interconnected nature of the variables has helped in determining the different aspects of the social inequality and the manner in which it affects the individual at the micro levels. 

References

Aldrich, D. P., & Meyer, M. A. (2015). Social capital and community resilience. American Behavioral Scientist, 59(2), 254-269.

Bjørnskov, C., Dreher, A., Fischer, J. A., Schnellenbach, J., & Gehring, K. (2013). Inequality and happiness: When perceived social mobility and economic reality do not match. Journal of Economic Behavior & Organization, 91, 75-92.

Cleaver, F. (2005). The inequality of social capital and the reproduction of chronic poverty. World Development, 33(6), 893-906. 
Hero, R. E. (2003). Social capital and racial inequality in America. Perspectives on Politics, 1(01), 113-122. 

Colombo, M. G., Franzoni, C., & Rossi?Lamastra, C. (2015). Internal social capital and the attraction of early contributions in crowdfunding. Entrepreneurship Theory and Practice, 39(1), 75-100.

Dubos, R. (2017). Social capital: Theory and research. Routledge.

Easterlin, Richard. 1995. “Will Raising the Incomes of All Increase the Happiness of All?” Journal of Economic Behavior and Organization, 27(1): 35-47. 

Ferrer-i-Carbonell, A. (2013). Happiness economics. SERIEs, 4(1), 35-60.

Ferrer?i?Carbonell, A., & Ramos, X. (2014). Inequality and happiness. Journal of Economic Surveys, 28(5), 1016-1027.

Goldthorpe, J. H. (2017). Social inequality and social integration. In Social Policy and Public Policy (pp. 32-40). Routledge.

Hobdari, B., Sun, P., & Goodstein, J. (2016, January). Multi-dimensional institutional reforms and board human and social capital in emerging markets. In Academy of Management Proceedings (Vol. 2016, No. 1, p. 12132). Academy of Management.

Hurst, C. E., Gibbon, H. M. F., & Nurse, A. M. (2016). Social inequality: Forms, causes, and consequences. Routledge.

Kim, Y., Kee, Y., & Lee, S. J. (2015). An analysis of the relative importance of components in measuring community wellbeing: Perspectives of citizens, public officials, and experts. Social indicators research, 121(2), 345-369.

Lin, N. (2000). Inequality in social capital. Contemporary Sociology, 29(6), 785-795. 

Lins, K. V., Servaes, H., & Tamayo, A. (2017). Social capital, trust, and firm performance: The value of corporate social responsibility during the financial crisis. The Journal of Finance, 72(4), 1785-1824.

People.hbs.edu. (2018). People.hbs.edu. Retrieved 29 March 2018, from https://www.people.hbs.edu/rditella/papers/jpubehappyineq.pdf

Purcell, S. W., Ngaluafe, P., Foale, S. J., Cocks, N., Cullis, B. R., & Lalavanua, W. (2016). Multiple factors affect socioeconomics and wellbeing of artisanal sea cucumber fishers. PloS one, 11(12), e0165633.

Rothstein, B., & Uslaner, E. M. (2005). All for all: Equality, corruption, and social trust. World Politics, 58(01), 41-72.

Salloum, S. J., Goddard, R. D., & Larsen, R. (2017). Social Capital in Schools: A Conceptual and Empirical Analysis of the Equity of Its Distribution and Relation to Academic Achievement. Teachers College Record, 119(7), n7.

Weforum.org (2018). Inequality has a major impact on a country’s wellbeing. Why?. [online] World Economic Forum. Available at: https://www.weforum.org/agenda/2017/08/inequality-makes-us-unhappy-heres-why/ [Accessed 29 Mar. 2018].

Zagorski, K., Evans, M. D., Kelley, J., & Piotrowska, K. (2014). Does national income inequality affect individuals’ quality of life in Europe? Inequality, happiness, finances, and health. Social Indicators Research, 117(3), 1089-1110.