Theresa May is about to smash a record that has remained unbroken since the dark days of Margaret Thatcher. Without a reversal of policy, Britain is set to be the most unequal country it has been since the Iron Lady was at Number 10.
Theresa May and inequality
The numbers were crunched by the Resolution Foundation, for its UK Living Standards 2017 report. It found that British wages are stagnant, prices are rising, and £12bn of welfare cuts are removing the safety nets put in place to protect against both. The report makes clear that this rise in inequality is not the result of cyclical economic shocks, but UK government policy.
The outlook for living standards in 21st Century Britain does not look promising…
And the projections in this report on both the weak and regressive nature of income growth in the years ahead should concern us all. But they are far from inevitable.
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So what? Why does wealth inequality matter? The answer was captured well in an excellent Comment is Free column by Aditya Chakrabortty recently:
Continue reading below...
There’s a lady I’ve been thinking about for the past few days, even though we’ve never met. She’s the central character in a true story told by the Europe expert Anand Menon. He was in Newcastle just before the referendum to debate the impact of Britain leaving the EU. Invoking the gods of economics, the King’s College London professor invited the audience to imagine the likely plunge in the UK’s GDP. Back yelled the woman: ‘That’s your bloody GDP. Not ours.’
Chakrabortty goes on to show how there is no single economy in Britain anymore, because overall GDP growth and economic performance no longer mean life is getting better for the majority of people in the country. For all the talk of economic recovery, only two regions in the UK are better off today than they were in 2007. Unsurprisingly, they are London and the south-east. No one living anywhere else is experiencing an economic recovery. And some are experiencing a depression.
Margaret Thatcher is famous for claiming that ‘there is no such thing as society’. Cameron’s legacy will be that there is no such thing as an economy – but a series of regional economies with vastly different prospects. A state-subsidised boom for inner London; a neglected pauperism for the Humber.
In short, governments are diverting public money from wealth-generating and health-generating projects that would create benefits across society. Quite literally: the rich get richer, and the poor get poorer. And in a world where money buys better education, health, power and influence – it matters a very great deal.
The bottom line
The bottom line? Fewer and fewer people move upwards in life. And ever greater numbers join the ranks of the impoverished and destitute.
In The Spirit Level, professors Richard Wilkinson and Kate Pickett prove that more equal societies are also healthier, happier societies. Whether it’s life expectancy, mortality rates, educational attainment, likelihood of conviction and incarceration for crimes, or an array of other indicators, the authors (and a replication of their findings by the Joseph Rowntree Foundation) demonstrate a correlation between inequality of income and inequality of outcomes.
Economic inequality is also hereditary; a social inheritance passed from parent to child. Research by Gregory Clark of the University of California found data to suggest that, in the same time period that neoliberal economic policies expanded, the economic inequality gap – the rate of social mobility (increased incomes and outcomes by successive generations) – declined for the first time in 1,000 years.
Enough is enough
For citizens across the world, outside the economic elite, rising economic inequality means rising inequality of health and wellbeing; and their inherited disadvantage is proving a barrier to improving not only their circumstances, but those of generations to come.
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–Read the Resolution Foundation report yourself.
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