Rising wealth inequality

With a hat-tip to Bella Caledonia, I think these videos are worth sharing as widely as possible.



I'm sure we've all seen many tables which compare average incomes in the UK with those of the rest of the OECD, and we generally get the impression that the UK is comfortably in the middle.

But the fact that the UK has such a huge gap in income between the richest few percent and the rest of us artificially inflates the UK's position in these tables, with the result that the poorest 20% in the UK are significantly worse off than the same 20% in the rest of the OECD.

This is from the High Pay Centre blog:

What would the neighbours say? How inequality means the UK is poorer than we think

Analysis of OECD figures suggests the poorest fifth of the UK population are the poorest in Western Europe

The poorest fifth of UK households are significantly worse off than the poorest fifth in other Western European countries, according to analysis of Organisation for Economic Co-operation and Development (OECD) data published by the High Pay Centre think-tank today.

The High Pay Centre examined the ‘OECD Better Life Index’ which estimates the average net disposable household income for the world’s richest economies, as well as the average for the poorest and richest 20% of households in each country.

In the UK, the incomes of the poorest fifth of households have an average income of just $9,530, much lower than the poorest fifth in other North West European countries such as Germany ($13,381), France ($12,653), Denmark ($12, 183) or the Netherlands ($11,274).

In fact, the poorest households in the UK are closer to the poorest in former Eastern bloc countries Slovenia and the Czech Republic than to the poor in Western Europe. This is despite the fact that the OECD estimates average incomes in the UK ($25,828) are similar to Denmark ($25,172) and the Netherlands ($25,697). The UK’s average is inflated by the incomes of the top 20% of households - at around $54,000, the third highest in the EU. In Belgium, the Netherlands and the Nordic countries, the top 20% make between $44,000 and $49,000.

The High Pay Centre analysis also notes that if the UK’s total income of around £1 trillion was divided in the same way as total incomes in Denmark or the Netherlands, 99% of UK households would be better off by around £2,700 per year.

High Pay Centre Blog, 16 June 2014

The full report is here.

Hopefully, this information will help put the repeated stories we get about the Welsh economy being on a par with eastern Europe into perspective. A significant part of our poor economic performance is not intrinsically to do with us, but is a failure of the UK state to distribute wealth (for although household income figures are different from regional income figures, there is a correlation, because the super-rich in the UK tend to be concentrated in London and south east England).

Much of the argument for Wales remaining part of the UK is that we are able to "share resources", as Unionist politicians have become fond of saying in the context of the Scottish independence referendum. But what is the point of being in such a union when it is clear that the UK doesn't share them ... or at least doesn't share them to anywhere near the same extent as happens elsewhere in Europe? And what hope is there for the future of the UK when the inequality between rich and poor is rising rather than falling?

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Anonymous said...

Michael, we have a delightful individual on Daily Wales with this:

MH's analysis was as bent as a dog's hind leg Robert. The difference is evident and any set of data properly benchmarked for free school meals show that the bulk of WM schools actually underperform. At benchmarks where they out perform EM schools (groups with higher FSM entitlement) there are few WM schools.2013, English level5+
FSM 0-10%...10-15%...15-20%...20-25%..25-30%...30%+
WM 41............36...........32............32..........24............29
EM 49............40............35...........33..........31.............27

As you can see WM schools outperform EM in the schools with more than 30% on FSMs but only 6% of WM schools are in this group. There are far more EM schools in the lower reaches with 50-60% on FSMs

Where is the ref to the research you did on this?
Sorry to be off topic.

Welsh not British said...

I have seen a similar video (to the second) based on American stats and it was very similar to this and that is not a good thing. There is no way of changing the whole of 'Britian' but we can change our chunk of it if we wish to. That is the way the Scots feel and that is why they will vote yes.

MH said...

For others, the comment 19:17 is referring to is on this article in the Daily Wales.

Robert is probably thinking of this post that I wrote two years ago. As it happens, the information I linked to in that post was provided by our favourite poster himself, which is why he still seems to be so angry about it.

Perhaps he has more recent information but, as always, if and when he wants anyone to take him seriously I'm sure he'll provide links to the figures he quotes.


That's the whole point Stu. I'm sure the High Pay Centre, and many people on the left of politics in England, are as sickened by this rising inequality as we are. But the reality is that they are in a minority, and there is absolutely no indication that they'll be able to reverse these trends. That's primarily because Labour in Westmnster will not adopt policies that would redistribute wealth, probably for the very good reason that they wouldn't have a hope of getting elected by Middle England if they did.

The fact that the mood in England is moving ever to the right (as it has for the last 30 years or more, set in motion by Thatcher) is actually the main driving force towards the break-up of the UK. It's inevitable. It's no different from right-leaning Flanders moving further and further away from left-leaning Wallonia ... except that England is a much bigger part of the UK than Flanders is of Belgium.

This is why the independence debate in Scotland has moved on from matters of nationality and identity (where it largely was, even a couple of years ago) and is now all about the sort of society Scotland could and should be. That's why, as you say, the momentum in Scotland is now with the Yes campaign, with the latest poll showing Yes on 48% and No on 52%. We in Wales should learn from this.

Anonymous said...

That the UK is one of the most unequal countries in the world should surprise no one and its why reports like the one above have so little media impact or among most UK voters.

From a welsh nationalist perspective the failure over 25 years to nail Labour on its income redistribution rhetoric while presiding over poverty levels in west wales and the valleys that earned 3 rounds of European funds and despite the billions spent according to some figures parts of Wales are now a par with eastern Europe is as bad as Labour's hypocrisy.

In Scotland the debate around independence tackling inequality isn't being driven by the SNP but by organisation like Common Weal and the Radical Independence Collective and it has more credibility as a results, Plaid Cymru needs to concentrate on the politics of Independence and let others do the heavy lifting over what Welsh Independence could do for poverty, welfare levels and inequality to broaden the messages appeal.

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