SDG 10: Can We Create an Economic System That Works For All?

Concentrations of income and wealth have been ubiquitous throughout history, but in recent years inequality has grown, along with concern over this issue. Thomas Piketty’s Capital in the Twenty-First Century, which traced the roots of inequality over 250 years, catapulted to the top of the bestseller list in 2017, but since then, the division between rich and poor has widened. In the past three years, 63% of all new wealth created went to the top one percent, and in the year or so following global lockdowns, billionaires in the U.S. alone increased their wealth by $1.2 trillion, or $1,200,000,000,000.

Unfortunately, inequality is not just a problem in and of itself. Highly unequal countries, as measured by the Gini coefficient, suffer from a host of health and social ills ranging from higher rates of violence, mental illness, and infant mortality to lower levels of education and social mobility. Inequality also contributes to political instability, fomenting distrust in public institutions, weakening democracy, and destabilizing the international order. This is why achieving the UN’s Sustainable Development Goal (SDG) 10, Reduced Inequality Within and Among Countries, is tantamount to creating an economic system that works for all.

Elaboration on SDG 10

In terms of how to achieve SDG 10, the UN takes a wide-angle view. At the national level, increasing incomes for lower earners is a primary objective. Others include promoting social, economic, and political inclusion; ensuring equal opportunities; and adopting fiscal, wage, and social protection policies. To achieve reduced inequality among countries, the UN has prioritized the regulation of international financial markets, enhanced representation of developing countries in global decision-making, and the “orderly, safe, regular, and responsible migration and mobility of people.”

Obstacles to Achieving Reduced Inequality

Within Countries

In its most recent edition of The Sustainable Development Goals Report, the UN noted that, prior to the pandemic, progress towards achieving SDG 10 was steady. Over half of countries had achieved sustainable income growth for the bottom 40% of the population that outpaced the national average, albeit most of these gains were in high- and middle-income countries. The pandemic appears to have reversed this trend as poorer households were more likely to suffer job losses than their white-collar peers, more of whom were able to Zoom into work from the safety of their homes.

At the national level, progressive taxation, whereby governments tax those in the top income brackets at higher rates than lower earners, is an effective method for reducing inequality in the short term. However, among most major economies and several emerging ones, income inequality has gone up since 1980, suggesting that taxation may have become more regressive over time or is not sufficient to keep up with growing income divides.

Furthermore, it is important to distinguish between income inequality, or incoming money flows from jobs and other sources, and wealth inequality, or the sum of valuable assets such as cash savings, real estate, and stocks and bonds owned by individuals. By focusing its efforts on income inequality alone, the UN may be overlooking the broader issue. Globally, the richest ten percent of the population owns 75% of total wealth, while the least affluent half owns only 2%. According to the Brookings Institution, wealth inequality tends to outstrip income inequality within countries, and, in a vicious cycle, “[higher] wealth inequality feeds higher future income inequality through capital income and inheritance.” In the U.S., it is estimated that by 2045, $84 trillion will be passed down between the generations, representing the largest transfer of wealth in the country’s history and further edifying inequality in that country. 

In addition to persistent gaps in income and wealth, another obstacle to achieving a more equal world is discrimination, which hinders social, economic, and political inclusion as well as access to equal opportunities. The UN report points out that discrimination is still widespread, with one out of six people worldwide reporting that they had experienced discrimination on any grounds. Racial discrimination was among the most ubiquitous forms, along with discrimination based on sex and disability.

Discrimination is directly tied to income and wealth inequality, as lucrative positions are denied to outgroups, trapping them in a cycle of poverty and preventing them from accumulating wealth. Worldwide, more than forty percent of people surveyed reported that opportunities to secure leadership roles (44%) and high-paying jobs (54%) in their countries were more widely-available to men. In Europe, a study of ethnic Roma in ten countries found that 80% lived below the at-risk-of-poverty threshold, compared to 17% of all individuals across the European Union. And in the U.S., racial wealth disparities have grown alongside inequality, with the average Black and Hispanic/Latino family holding only 15 to 20 percent of the net wealth of the average white family.

Among Countries

To combat inequality at the international level, the United Nations has made regulation of international financial markets a key objective. The need for such reform was illustrated back in 2016, with the leak of the Panama Papers, which revealed the extent to which the global elite attempt to obfuscate the sources of their wealth.

In a recent report (PDF), the UN notes that “the international tax architecture has not kept pace with a changing world,” resulting in a system wherein wealthy individuals do not contribute their fair share to national safety nets. “A two-track world of haves and have-nots holds clear and obvious dangers for the global economy and beyond. Without urgent, ambitious action to change course, this gap will translate into a lasting divergence, economic fragmentation and geopolitical fractures.” Priority areas for reforming the international tax and financial system include global economic governance, debt relief, international public finance, and policy and regulatory frameworks for capital markets, among others.

Conflicts and crises around the world are yet another obstacle to achieving global equality, particularly in terms of achieving safe migration and mobility. According to the UN, “[record] numbers of people are fleeing their countries in the face of mounting crises.” In 2022, one in every 233 individuals worldwide were forced to leave their countries due to factors including conflict or war, affronts to human rights, persecution, or disturbances in public order.

Many of these passages are neither safe nor orderly. An estimated 5,000 refugees annually die during their voyage, with the majority of deaths occurring in routes to and within Europe. One such incident occurred in June of 2023, when a vessel carrying between 400 and 750 people sank off the coast of Greece, sparing only around 100 survivors. Tragedies like this are tied to a two-tiered immigration system that favors the influx of well-off individuals over those from impoverished nations. Some countries, such as Malta, offer “golden visas” to wealthy individuals with substantial funds to invest, while simultaneously refusing to aid ships carrying migrants in need of aid off their shores.

Ties to Other Goals

Progress towards achieving SDG 10 is inextricably linked to achieving other SDGs, such as Goals 1 to 3, No Poverty, Zero Hunger, and Good Health and Well-Being, and Goals 4 and 5, Quality Education and Gender Equality. Those living in highly unequal societies are more likely to hit a glass ceiling that prevents them from breaking free from the cycle of poverty and hunger, and, as mentioned earlier, suffer from a range of health and social challenges.

In the United States, which has seen a steady increase in GDP alongside inequality (despite a recent drop due to COVID relief), there has also been a sharp uptick in “deaths of despair” from causes such as suicide, drug overdose, and alcohol-related liver disease, which leading experts attribute to an economic system that no longer works for working-class individuals. Problems such as these create a domino effect leading to widespread suffering across all levels of society.

Conversely, making progress on the other SDGs is also essential to curbing inequality, as without good health or a quality education it is difficult to achieve economic empowerment and thereby reduce inequalities. According to the UN report on the Goals, “The SDGs are the universally-agreed road map to bridge economic and geopolitical divides, restore trust and rebuild solidarity. Failure to make progress means inequalities will continue to deepen, increasing the risk of a fragmented, two-speed world.”

Looking Ahead

Although numerous obstacles exist, following the necessary steps to achieve SDG 10 and related Goals remains a worthwhile and necessary pursuit, especially as growing inequality threatens stability at the national and international levels. A more equal world translates to a world in which one’s economic prospects are not pre-determined by birth, government and financial systems work for all, and individuals do not have to flee their countries in pursuit of safety or opportunity.

Despite relatively sustained economic growth, the burgeoning of the billionaire class amidst increasing economic precarity for the vast majority has demonstrated that a rising tide does not, indeed, lift all boats. In light of this, countries must actively pursue policies that make SDG 10’s vision of reduced inequality a reality, such as implementing progressive taxation, facilitating the accumulation of wealth for low-income populations, ensuring that rich countries send their fair share of aid to developing nations, and working to reform international financial and immigration systems.