Whilst reading an excellent article from Spiegel which I re-blogged, I reflected on the wide-ranging problems for the current generation of young people in Europe, with youth unemployment in worst cases close to 60%, all seriously aggravated by German excessive zeal for austerity, I pondered the following open questions:
- Since the financial crash of 2008, has their been a reversal of social mobility in Europe?
- In austerity ravaged Europe, do the children of wealthy, educated, privileged families have an unfair advantage?
- How should policy-makers encourage greater social mobility in Europe?
John Gelmini responded with a thoughtful response focused on opportunities for the UK, which I am sharing below.
[For the interested reader, I re-blogged an excellent Guardian article, interviewing German Chancellor, Angela Merkel, on her thoughts on youth unemployment in Europe.]
A Hard Look at UK Social Mobility and Unemployment – John Gelmini
The answers to these questions are:
3) By reversing the current thrust of policy which is to make the super wealthy even richer and to further impoverish everyone else
In reality, if one looks at the situation which prevailed in the UK and Europe since 1885, the distribution of wealth has remained the same until the present day and if anything is getting worse.
People cannot see this because they own cars, computers, electrical appliances and if they are not on the dole and scavenging in Food Banks they imagine that they are well off.
The figures from the Institute of Fiscal Studies for 2011 (current figures are even worse), tell a different story.
Out of a population which is officially 63.5 million:
a) 730,000 earn more than £100,000 gbp annually
b) 14,000 earn over £1 million gbp annually
c) 0.02% of the population, the super wealthy, earn £2.5 million gbp a year before tax
d) The top 1% of workers (there are 32 million people in the workforce but not more than 16 million of them are actually working) earn £225,000 gbp a year
e) The top 10% earn more than £60,000 gbp
Average earnings in the UK are £27,000 gbp rising to £32,000 gbp in London and the South East and the earnings of Times 1000 Chief Executives are £7.2 million gbp including bonuses, other emoluments, benefits and cars.
The gap between those at the top and those on average earnings is now 450 to 1 or 1000 to 1 if you compare hedge fund managers to those on average earnings.
In Germany, the same gap is about 12 to 1 and perhaps 20 to 1 in Japan which suggests we have adopted the “winner take all philosophy ” which prevails in America where the gap is even bigger.
As a lifelong Conservative, I am no leveler but history shows us that where the gap between rich and poor gets too big society destabilizes. Ancient Rome went in this direction whereby taxes and imposts on ordinary people became so great that people revolted. The revolts were brutally put down by the Roman legions using forced marches to reach them all but in the end there were so many that they were fully occupied in putting them down leaving a power vacuum for the barbarians who eventually consigned that empire to the history books.
If the UK needs a model of Best Practice for its economy and to reverse these trends it needs to look to Switzerland, Singapore and Lichtenstein for governance, tax efficiency and immigration, Singapore for financial services, Finland, Singapore and South Korea for state education, Italy for diet, Germany for exports, the Dutch for reclaiming land from the sea, America for worker productivity, Japan for advanced robotics and the Chinese for getting things done and working with messianic vision.
The UK is good at inventing things but pretty useless at funding them or in seeing the benefits of what has been invented. Its workers are lazy, unproductive and unwilling to change and the boss class likes to reward itself for failure and not invest except in its own pay. All that has to change, and then with sensible emulation of the Best Practices of these other countries, building on the things we ARE good at, and there might be a chance of arresting this country’ decline.
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