Public services top up the income of the poorest people by 76%

Health and education are powerful weapons in the fight against global inequality

Countries can start tackling inequality today by triggering an “economic stimulus” directly into the pockets of those who need it most – by investing more in public services like health and education, says Oxfam.

In a report today “Working for the Many”, Oxfam says that public services such as the provision of health and education are among the strongest weapons to use in the mix against global inequality. They benefit everyone in society but the poorest most of all.

Oxfam cites an OECD study that says that, on average, all public services provide the poorest people with the equivalent of 76% of their post-tax income. Spending on these services has the same inequality-busting potential in rich and poor countries alike, reducing income inequality by between 10-20 per cent. This is why cuts in these services around the world are so catastrophic.

Extreme inequality must be addressed

“The world is waking up to the scandalous fact that the richest 85 people own as much wealth as the poorest half of the world’s population. It is time to recognize that one of the simplest things that governments can do to help diffuse this ticking time-bomb is to invest more in public services,” said Oxfam executive director Winnie Byanyima.

While public services can mitigate rising trends in inequality, user fees and the policies of cuts and austerity in both North and South have the opposite effect, Oxfam says. Health user fees push 150 million people into ruin every year around the world. The average family in Pakistan would have to spend 127% of its income to send all their children to a low-fee private school.

Despite all this evidence, between 2008 and 2012, more than half of all developing countries cut their education spending and two-thirds cut their health spending too. “These cuts focus the pain directly at those who can least stand it,” Byanyima said.

No to privatization of services

”Governments must value the impact of free public services and say no to fees, no to budget cuts, and no to the privatization of services that hit the poorest hardest, when inequality is already stacking the deck against them,” Byanyima said.

800 women die each day in childbirth, 795 of these deaths occur in developing countries. Each year 57 million children don’t go to school and studies show that a child’s chance of getting four years education halves if they are born into a poor family.

“Surely no-one disagrees that governments need to get more kids through school and more mothers and babies safely through birth,” she said. “And by investing more in those same services they can also help to tackle inequality – it becomes a no-brainer.”

Oxfam has programs and partnerships that support people’s right to health and education in 64 of the 93 countries in which it works around the world.