Social equity supposes the application of the rights and obligations of people in a way that is considered fair and equitable, regardless of the group or social class to which each person belongs. For this, there are measures in some countries to avoid situations of social inequality. Most of them affect the lack of access of people to fundamental rights such as health or education.
Social equity is the name in which the set of practices that seek to demolish all social, cultural, economic or political barriers that imply exclusion and inequality are called. Its ultimate goal is that, regardless of the circumstances in which they find themselves, all members of a society have the same opportunities and rights.
Inequity of income and fortunes
There are significant differences in people’s income, easily seen in the usual comparison between the work accidents with sick leave, and unpaid leave for personal matters. In the latter case, the firm may cut the employee’s salary of the factory worker and the great bank executive.
Or between the employee of a business and the owner of a company —comparisons that are usually interpreted as injustices, or at least as undue inequality.
This comparison is striking, but unrealistic because it fails to consider all the intermediate cases of less low and less high income. Even sometimes income is confused with own capital, making the comparison even more misleading.
Unavoidable Variable Income
It is a reality that people’s incomes vary —which is inevitable and depends on things like the following.
- If there are many workers and few jobs, income will tend to fall.
- If there are many jobs and few workers, income will tend to rise.
The two previous principles apply in different ways depending on the type of work offered: professions in demand and with few professionals in the field will tend to achieve high income.
And the opposite: professions that are in little demand and with many professionals in the field will tend to have low incomes.
Preparation —years of study and experience— for a profession tend to raise income, largely depending on the demand for each type of preparation.
The capital used that increases the worker’s productivity and makes him more productive will tend to raise personal income —when the worker has the training to use that technology and that produces differences between countries.
The examples clarify the principles noted above.
- Business employees will tend to be low-income: many can do the job, it requires no more than basic schooling—although depending on the expansion of investment, the demand for this work may grow and raise wages.
- Workers tasked with cleaning a building will tend to be low-income: many can do the job, and it requires no professional training.
- Highly specialized doctors, for example, will tend to earn more than nurses: they are few in number, their specialty is in demand.
- People with valued physical qualities, such as skilled athletes, will tend to have higher incomes than athletes without those qualities.
- Highly educated people will earn differently depending on their area of specialization—making, for example, a Ph.D. in physics tend to earn more than a Ph.D. in medieval literature.
Third Party Valuation and Equity
The above can be summarized using the concept of subjective value – the idea of the Austrian School of Economics: both the buyer and the seller of labor appreciate the values offered and demanded differently and this is what produces different income.
• Employer valuation. People with skills valued by employers will tend to have higher earnings than people with skills less valued by employers—their earnings will rise the fewer such people there are and the more their skills are valued.
• Employee assessment. The worker also makes his assessment of the job offered —from his employer— and will accept an income depending on that judgment. They are evaluations that incorporate elements such as: income, stability, quality of company and superiors, closeness and others.
Social equity of opportunities
Acceptance of reality is an impossibly bitter pill to swallow for many—for example, those who advocate the need to equalize economic opportunity for everyone in a society.
That is wrong for social equity in one of its interpretations —which is why it is claimed that economic opportunities for material advancement should be equalized for all.
freedom and equity
Does this inequality of economic opportunity occur in a free economy society? The answer is yes.
In such a society, the economic opportunities of people with low incomes are more limited than those of people with high incomes.
It is impossible to deny that one of the consequences of economic freedom is the inequality of results, that is, of income and personal wealth. There is no way to avoid this economic inequality and its consequence, the inequality of material opportunities.
In this free economy, income is proportional to people’s actions and initiatives —with random factors—, which constitutes an incentive to work, effort and, in general, personal innovation.
The dilemma of social equity
Societies and their governments move between two central values —equality and freedom—, recognizing that both are positive and desirable.
They are natural parts of the human essence. In what follows I explore one possibility, that of a regime based on social equity alone .
The goal of that regime would be contained in the idea that the greater the equity, the greater the happiness in the country —his government would possess that priority goal, that of total equity among its citizens.
Deciding on a society of equity as its central goal requires a definition of equity—be it explicit or implicit, there is no possible escape from that definition. The definition adopted would move between two possibilities:
A. Natural equity
It corresponds to the equality of human nature in liberties, rights, obligations —and would have a very clear manifestation in the laws, which would be applied equally to everyone, regardless of the accidental characteristics of the person, such as sex, religion, race, age and the like.
This is the equity that a rule of law provides in a liberal democratic republic.
B. Material equity
It corresponds to equity in the sense of the economic dimensions of possessions, income, personal or family wealth. No person in that society could be richer than another, at least significantly.