Optimal income distribution bolsters social resilience

Source:Chinese Social Sciences Today 2022-08-08

Social resilience usually refers to a society’s ability to maintain social integration and keep its effective operation when encountering destructive forces, and the possibility that a social structure does not decompose or collapse when encountering shocks or destruction. From an economic point of view, social resilience is mainly determined by a society’s level of material production and industrial system.

Aiding low-income groups

However, history constantly proves that a country with a developed economy, complete industrial system, and complete industrial chain, may also be weak in social resilience and ability to resist social risks. Although social resilience is a reflection of a country’s comprehensive national strength, the bottom line of social resilience is often determined by social groups with the lowest risk-tolerance—those at the bottom of society, burdened by the worst economic situations, as in the barrel law.

For example, as the COVID-19 pandemic is sweeping across the world, the virus’ high contagion rate makes quarantine and lockdown an effective and even necessary measure to contain the spread of the virus. As a result, many countries have taken such steps as shutting down schools, workplaces, and suspending production.

However, such effective prevention and control measures are often difficult to truly implement, and in some countries, protests resisting quarantine measures such as shutdowns occur. While cultural values certainly influence these events, realistic factors such as financial pressures and day-to-day load also contributed to social unrest.

For low-income groups, the lower their earnings, the more likely they are to encounter difficulties, and the weaker their risk-tolerance is. Even worse, they may lose their jobs and struggle to feed their families, leaving them unable to meet the basic needs for survival.

This is the fundamental reason why many countries gave subsidies to their citizens, especially to low-income groups, during shutdown periods. Direct subsidies, offered to low-income groups through redistribution, will help them endure the difficulties. In many cases, if relief is not provided in a timely way, this would still cause social unrest.

It is in this sense that low-income groups make up the bottom line of social resilience. Only by improving these groups’ income levels and their ability to resist risks, can social resilience be effectively improved. China completed victory in the fight against absolute poverty in 2020, when it helped lift all 832 poverty-stricken counties nationwide out of poverty and raised more than 70 million people above the poverty line. This has significantly improved low-income groups’ ability to resist risks, which has fundamentally enhanced social resilience.

Expanding middle-income groups

While increasing low-income groups’ income levels means a higher baseline social resilience, the population’s majority still determines the overall level of social resilience. Therefore, to improve overall social resilience, it is more important to shrink the size of low-income groups and enlarge the proportion of middle-income groups.

According to data released at a series of press conferences themed “China in the Past Decade” in May 2022, the income ratio between urban and rural residents in China has significantly lowered to 2.5:1. In terms of the Engel coefficient, which reflects quality of life and consumption upgrades, Chinese people are now living relatively well-off lives according to UN standards. At present, China’s middle-income group has exceeded a totality of more than 400 million, and an olive-shaped distribution structure—which is large in the middle and small at both ends—has been initially formed.

Optimizing income distribution

While the development of productive forces has greatly increased wealth created by human beings, it also prolongs and complicates the income distribution chain.

During the period when an economy has rebooted and is recovering, it will take longer time and there will be greater uncertainty for groups at the end of the income distribution chain to attempt at obtaining consistent income. These groups are thus more urgently in need of micro-loans, subsidies, and other support, to survive the crisis. They also need more government-led redistributions and socially-led tertiary distributions.

Therefore, how we optimize the mode of income distribution and redistribution is a key issue to be addressed in countering social risks. A typical example is that during the pandemic period, many places in China issued consumption coupons directly through WeChat, Alipay, and other online platforms. With the help of these platforms, consumption coupons could be issued, received, and used immediately, which met the needs of at-risk groups in a more timely way. Meanwhile, openness and fairness is also ensured throughout real-name consumption tracking, conducted with the help of online platforms. Therefore, when dealing with social risks, the top priority is repairing the broken income distribution and redistribution chain in a timely way.


Zhang Maoyuan is a professor from the Public Administration School at Guangzhou University.

Editor:Yu Hui

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