Rotman Management – April 2019

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Researchers have demonstrated that it is not income lev-

els per se that predict health and social problems. What

is it, then?

Differences within countries are as important as levels of

income. In other words, there are two major ways for health

and social problems to deepen. The first is poverty; and

the second is inequality. This means that, even in relatively

wealthy countries such as Canada, big differences in wealth

between the rich and the poor can cause societal distress

and unrest.

You believe that businesses and other institutions play a

key role in perpetuating inequality. How so?

In any organization — whether it is public, private or not-

for-profit — internal processes create power dynamics,

and those dynamics foster cultures where gender-based

discrimination, racial discrimination, and discrimination

towards other vulnerable populations proliferate. Organi-

zational practices — many of which have become taken-

for-granted — perpetuate inequality by privileging some

groups over others in hiring, promotion, reward and oth-

er decisions. This is only being amplified in the current

Increasing economic inequality has
emerged as one of the defining issues
of our time. Describe how it is affecting
people.
Inequality polarizes populations and con-
centrates power, threatening social stabil-
ity and democracy in both direct and subtle ways. Oxfam
recently reported that 42 individuals now have the same
wealth as the bottom 50 per cent of the world’s population.
Furthermore, 82 per cent of all economic growth created
in 2017 went to the richest one per cent of the population,
while the poorest 50 per cent saw no increase at all. In the
U.S., things have been even more extreme, with 95 per cent
of the income growth between 2009 and 2012 going to the
wealthiest one per cent.
The U.S. is not even the most unequal country: Chile
and Mexico having the highest levels of inequality in the
world, while Estonia has shown the most rapid recent in-
crease. Societies with higher levels of inequality have higher
levels of both social and health problems, including higher
crime and violence rates, greater degrees of mistrust and in-
creased levels of obesity and mental illness.

Tackling Inequality:

The Role of Business

Interview by Karen Christensen

FACULTY FOCUS Anita McGahan, Rotman School of Management and Munk School of Global Affairs