CAN you enjoy economic growth without increasing inequality? was the question asked by the Institute for Public Policy Research (IPPR) and the subject of interesting discussion last week, the same time they launched a new economic commission exploring ways to tackle underperformance in the North’s economy.

This is an important question given the seminal work of Wilkinson and Picket, The Spirit Level, which demonstrated the significant social and economic downsides of growing inequality – from poorer economic performance, lower educational attainment, worse health outcomes, increased crime and suicide rates, and more.

There weren’t any benefits from growing inequality. The message is clear. Inequality has a significant and consistent negative impact on quality of life. It matters also as inequality is growing and has been for at least the last 30 years.

The most well-off in society have been pulling further and further away from those at the bottom end of the earnings spectrum to such an extent that the top earners are now paid up to 145 times the lowest earners in the same company.

Although the evidence isn’t in play yet, current trends in the labour market and the coalition’s welfare reforms are also going to lead to dramatic increases in inequality.

While mid and lower-end wages are, in the main, flat-lining, growth part-time work has constituted a significant proportion of what recent employment growth there has been. Household incomes for low and average earners are increasingly diminished while the top earners continue to enjoy above inflation pay rises.

Employment, especially good quality work, is clearly the key way of tackling poverty at the bottom end of the labour market. Regrettably, employability and employment support for those that need it most is more and more scarce as the public agencies that invest in those activities are forced to rein in spending in those areas.

At the same time wages at the bottom end are worth less and less as they fail to keep up with inflation or the rest of the labour market.

The state can choose to intervene to address clear market failure – invest in measures to stimulate and support employment for those in most need and raise the floor of low wages – or it can choose, as is happening now, to allow those who have the capacity to improve their own lot in life and pull further away from the rest of society while others find it harder and harder to cope.

:: Kevin Rowan, regional secretary, Northern TUC