Monday, January 28, 2013

Condemned by its own statistics

When she was‭ ‬Minister for Women and Equality‭ ‬in the last Labour government‭ ‬Harriet Harman set up a National Equality Panel to look into inequality in UK society.

The report,‭ ‬"An Anatomy of Economic Inequality in the UK",‭ ‬came out in‭ ‬January‭ ‬2010‭ ‬in the period of the run-up to a general election at which Labour‭ ‬was desperately trying to cling onto their heartland support and produce clear red water between themselves and the Tories.‭ ‬But it‭ ‬is‭ ‬still‭ ‬useful and‭ ‬instructive reading.‭ ‬Although it mostly contained data that had been made available elsewhere,‭ ‬its focus on equality‭ ‬is worthwhile and it does draw all of the current knowledge on the state of equality in the UK into one place.‭

Income inequality

This graph tells a‭ ‬revealing tale:
Not only‭ ‬has the gap between the top and bottom earners widened over the last forty years‭ (‬quite radically‭) ‬but also it has risen quite markedly as compared to median earnings‭ (‬the red line‭)‬.‭ ‬It is also very‭ ‬striking that the lowest paid workers‭ (‬the‭ ‬bottom‭ ‬10‭ ‬percent,‭ ‬the‭ ‬orange line‭)‬ have barely gained any substantial increased over‭ ‬the whole of that period.‭ ‬So much for the idea propounded by Tories of the‭ ‬‘trickle down effect‭’‬ of gains for the rich‭ ‬eventually‭ ‬becoming gains for the poor too.‭ ‬Likewise,‭ ‬so much for the social-democrat notion that growth of the economy overall will abolish poverty.‭ ‬Through most of that period,‭ ‬the British economy‭ ‬grew,‭ ‬but clearly only‭ ‬to the benefit of those at the top.

To be fair to Labour,‭ ‬and this‭ ‬could be noted for much of their time in office,‭ ‬the most they‭ ‬sometimes‭ ‬achieve is a halt to the growth in the gap between rich and poor but not a reversal.‭ ‬Much of the reason they can do no more than that is down to the changes in the economy since the‭ ‬1970s,‭ ‬with the transfer of productive industry to the power houses of east Asia.‭ ‬Further,‭ ‬structural unemployment has persistently remained since the late‭ ‬1970s,‭ ‬effectively preventing any remedy through the labour market.

Labour has struggled to try and create conditions of social equality,‭ ‬but cannot and will not act against the very structures and systems that create it.‭ ‬It is like someone campaigning to mitigate the effects of slavery without trying to abolish slavery itself.

The report showed,‭ ‬but‭ ‬did not foreground,‭ ‬was‭ ‬that the top‭ ‬1‭ ‬percent of‭ ‬incomes‭ ‬got over‭ ‬£2,000‭ ‬per week.‭ ‬Indeed,‭ ‬it is notable on the graph of incomes‭ (‬below‭)‬,‭ ‬that there is a sudden and noticeable spike at the top‭ ‬of the graph,‭ ‬reflecting the small number of people who have astronomical incomes.‭ ‬The spike is almost a qualitative shift between the vast majority on a‭ ‬rising‭ ‬continuum of‭ ‬incomes and the‭ ‬3.3‭ ‬million,‭ ‬out of a population of around‭ ‬60‭ ‬million in the UK,‭ ‬with a weekly income of more than‭ ‬£1,000‭ ‬a week..‭

Figure S1:‭ ‬Equivalent net income,‭ ‬UK‭ ‬2007-08‭ (‬at‭ ‬2008‭ ‬prices,‭ ‬before housing costs‭)
(a‭) ‬Number of individuals with income in each range‭ (‬millions‭)
 The chart below demonstrates this further‭ ‬– the top‭ ‬1‭ ‬percent have more than double the income of those at the start of the top‭ ‬10‭ ‬percent of earners.


Wealth inequality


The statistics on total wealth are worth noting as well:

‭‘‬Median‭ ‬total wealth‭ ‬(including personal possessions,‭ ‬net financial assets,‭ ‬housing and private pension rights‭) ‬is‭ ‬£205,000.‭ ‬The‭ ‬90:10‭ ‬ratio is almost‭ ‬100,‭ ‬with the top tenth of households having wealth above‭ ‬£853,000,‭ ‬and the bottom tenth having less than‭ ‬£8,800.‭ ‬The‭ ‬90:10‭ ‬ratio is so high because the poorest households have such little wealth.‭ ‬However,‭ ‬even looking more narrowly at the top half of the wealth distribution,‭ ‬those in the top tenth have more than‭ ‬4.2‭ ‬times as much wealth as those in the middle,‭ ‬twice the corresponding ratios for earnings or household income.‭ ‬1‭ ‬per cent of households has total wealth of more than‭ ‬£2.6‭ ‬million.‭’


The authors of the report‭ ‬advocated reducing inequality.‭ ‬They addressed the various philosophies that claim that social inequality is necessary or even just.‭ ‬They maintained,‭ ‬though,‭ ‬that international comparisons of economic output do not correlate to great inequality,‭ ‬and‭ ‬claimed‭ ‬that some much‭ ‬less unequal societies than Britain are more productive and successful.

Further,‭ ‬although they noted that all the main political parties subscribe to‭ ‬‘equality of opportunity‭’‬ (as opposed to equality of outcome‭)‬,‭ ‬it‭ ‬is clear that the inequalities they discovered do not relate to life choices,‭ ‬but in fact reflected the cumulative effects of various advantages and disadvantages produced by background,‭ ‬and yes,‭ ‬class.‭ ‬Although most of the differences they highlighted were between different parts of what we would understand as the working class‭ (‬anyone whose main economic asset is their ability to work‭) ‬the conclusion that inequality at birth stays through life remains a stark and‭ ‬indefensible‭ ‬fact.

Despite the narrowing‭ ‬of wealth and income gaps towards the‭ ‬1960s,‭ ‬the strength of wealth is back.‭ ‬Very telling‭ ‬was their revelation that the share of‭ ‬income for the top two thousandth of the population‭ (‬the very,‭ ‬very,‭ ‬very,‭ ‬rich‭) ‬is back to where it was in the‭ ‬1930s.‭ ‬Since‭ ‬1969‭ ‬their share of income has trebled from‭ ‬0.5‭ ‬percent to‭ ‬2.5‭ ‬percent.‭ ‬For the top‭ ‬1‭ ‬percent they have gone from‭ ‬4.7‭ ‬percent in‭ ‬1979‭ ‬to‭ ‬10‭ ‬percent by‭ ‬2000.‭ ‬Put another way,‭ ‬a century of Labour and Labour governments has not dented the power and wealth of those at the top of society.‭ ‬That,‭ ‬as opposed to any specific failure of the current Labour administration,‭ ‬is the lesson that socialists‭ ‬draw from this report‭’‬s findings.

For those who would deny that inequality is a problem,‭ ‬it must be sufficient to show that inequality in wealth,‭ ‬income and social status translates into a shorter,‭ ‬less healthy life,‭ ‬with less knowledge and personal development.‭

Since‭ ‬2010‭ ‬the report‭ ‬has been gathering dust‭ ‬in some corner of Whitehall,‭ ‬but‭ ‬as the BBC‭’‬s Mark Easton noted‭ ‬commented at the time:
‘‬The problem for the politicians is that measures to reduce social or income inequality will always be controversial because they mean neutralising the advantages of wealth‭ ‬– a prospect that those with money and influence will fight hard against‭’.

For us socialists,‭ ‬on the other hand,‭ ‬it is‭ ‬a‭ ‬weapon to show the rotten truth of our present system of society and‭ ‬a‭ ‬spur towards working to overturn it in its entirety.

PIK SMEET

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