Davos 2020: Poor social mobility and inequality recognised as a crisis

Globalisation’s fundamental pillar is mobility — a world where ideas, people, goods, and services can cross borders with ease and efficiency. Even as the world struggles to push globalisation without its negatives, a key agendum for the Davos summit is social mobility.
 
The World Economic Forum (WEF) has created a Social Mobility Index, which “is designed to provide policymakers with means to identify areas for improving social mobility and promoting equally shared opportunities in their economies, regardless of their development”.
 
A key finding from the index is that irrespective of the size and maturity of the economy, most countries have a poor record of social mobility. Despite the focus on meritocracy, an average individual doesn’t have the freedom to make livelihood choices. “An individual’s opportunities in life remain tethered to their socio-economic status at birth, entrenching historical inequalities,” says the WEF report on social mobility.

The WEF Social Mobility Index benchmarks 82 countries to help policymakers assess whether their citizens have equal economic opportunities. Can a child have a better life than his/her parents? Can the impact of socio-economic background on equal opportunity be measured effectively? These questions are posed to policymakers.
 
The index shows that only a handful of countries have the right conditions for social mobility. The top five, unsurprisingly, are Nordic countries — Denmark, Norway, Finland, Sweden, and Iceland.
 
Among the G7 economies, Germany is the most socially mobile, ranking 11th with 78 points, followed by France at 12th position. Canada ranks 14th, followed by Japan (15th), the United Kingdom (21st), the United States (27th), and Italy (34th).
 
Among the large emerging economies, the Russian Federation is the most socially mobile of the BRICS grouping, ranking 39th with a score of 64 points. The next is China, which ranks 45th, followed by Brazil (60th), India (76th) and South Africa (77th).
 
The poor ranking of India should trigger a deeper response from policymakers. This is yet another ranking where India needs a strong policy intervention.
 
“Globalisation and the Fourth Industrial Revolution have generated significant benefits, but have also exacerbated inequalities. The Fourth Industrial Revolution, and with it, continuing and future disruption to labour markets, will likely compound differences in social mobility for those countries unprepared to take advantage of new opportunities,” says the report with reference to emerging economies.
 
Add to this the inequality report by Oxfam and the global situation appears dire. The world’s richest 1 per cent have more than twice the wealth of 6.9 billion people. Women’s unpaid care work has a monetary value of $10.8 trillion per year. This is three times the size of the world’s tech industry.  Davos is the mecca of capitalism, but it is now genuflecting to social issues. Perhaps a realisation is dawning that an unequal society also means reduced consumers and global demand.