There are some interesting points in a recent OECD note on the latest trends in income inequalities and key findings from their 2015 report “In it Together: Why less inequality benefits all”.
The average household income in the UK is about 10% lower than in Germany and France. The average income of the bottom 10% in the UK is 40% lower than in France and 49% in Germany.
How little UK employers pay the bottom 10% of earners. And how little the government acts to reduce the gap. This is what I see when politicians talk of ‘aspiration’: aspire to not being the one in every ten people being paid sod all to do the crap work.
The appreciation of property prices well above inflation
has been a key factor leading to higher median wealth in the UK compared to other OECD countries.
In other words, the UK median benefits directly from houses going up in value so much every year. Due to a chronic undersupply of housing. In what would be called a market failure due to its effects on inequality and debt if it didn’t also happen to underpin the finances of two thirds of the population. If we actually had enough homes in a sensible property market, this imaginary money (the magical increase in capital in your home each year) that bizarrely allows the median to leverage more credit and acquire more debt to prop up unsustainable consumption would not exist. Meanwhile, the magic money eludes the lower quintile altogether, who rent at exorbitant rates from the median and the top who own all the fucking houses.
Total employment is at an all-time high. However, many of the new jobs are self-employed and part-time jobs. Non-standard workers earn considerably less than standard workers (employees in full-time jobs). Non-standard work increases inequality and poverty. In the UK, despite the strong poverty-reducing effect that the tax-benefit system has on households with non-standard workers, the poverty rate for households relying solely on non-standard work is 20%. That is 5 ½ times higher than for households relying on standard work.
In other words, we’ve got loads of jobs but a lot of them are shit, and almost one in five people actually working them is in poverty *despite* being both working and in a benefits system designed to reduce inequality. Again, aspire – aspire to not be one of those poor bastards.
in the UK, the self-
employed are less likely of moving into a standard job than the unemployed.
Well done for pulling yourself up by your bootstraps and becoming self employed. Conjures up images of go-getting entrepreneurship, doesn’t it. If you’re one of the many people becoming technically self-employed to stuff envelopes at home 8 hours a day, or contracting yourself out on a self employed basis to a cleaning procurement agency, i.e. the vast majority (self employed does not equal business tycoon), good luck. You’re now working and thereby acceptable to our political overlords, but you are statistically unlikely to earn 50% of someone with a job, or to get a job yourself.
Between 2007 and 2012 the average household disposable income fell by accumulated 8.6%
Presented without comment.
While in other countries income tax changes played an important role, in the UK fiscal consolidation was driven mainly by changes in benefits.
A policy of taxing people with money less and reducing benefits for people without money increased inequality? Whodathunkit.
Increase taxes on wealth rather than labour.
And there’s the rub. This is presented as a suggestion for ‘policymakers’. The day we tax wealth, say a council tax rebanding, I will eat all the hats. The people with a disproportionate amount of the wealth make these decisions. Turkeys are not famous for voting for Christmas. Ensuring tax is skewed to income, and not wealth, ensures a secure future of locked in advantage for people with wealth. It’s called capitalism for a reason.
In summary, we don’t give two shits about inequality, because to do so would require a broad and nuanced political and economic approach, and we are trapped aboard a kind of economically illiterate, politically dogmatic, stinking, oil tanker ass way of life. There is no real alternative. The only way is to figure out how to get the asshole captain to steer this foetid bastard away from the rocks.