Opinion – UK – Chartbook of Economic Inequality

Oxford researcher, Max Roser, presents stunningly clear graphical data on trends in inequality. Today, I’m focusing on the UK where the charts present powerful evidence of increasing UK inequality.

Source: UK – Chartbook of Economic Inequality

The main highlights include:

  1. Top decile of earnings has increased from 165 per cent of median in 1978 to 197 per cent in 2013.
  2. Gini coefficient for equivalised disposable income is now around 10 percentage points higher than in 1980, but most of the increase took place in the 1980s.
  3. Overall inequality fell for a sustained period during Second World War and in late-1960s and 1970s.
  4. Relative poverty rate in 1990 was twice that in 1977.  However, overall the poverty rate has been falling since the 1990s.
  5. Top gross income shares fell from 1914 to the 1970s; since 1979 it has more than doubled.
  6. Compared to income, downward trend in top wealth shares from 1923 to end of 1980s; now levelled off.

The data for above website have been compiled by Anthony B Atkinson and Salvatore Morelli and are published as Atkinson and Morelli (2014). The online version of the Chartbook and the online data visualisations have been designed and constructed by Max Roser. The authors acknowledge support from the following institutions: Programme for Economic Modelling · Institute for New Economic Thinking – Oxford · Oxford Martin School

The authors explain their measures of income inequality.

It is interesting to reflect on the implications. Most people would cite the loss of traditional jobs, with man’s output increasingly being replaced by machines and jobs being offshored to low cost countries. BUT this needs to be considered against recent research from the IMF that better educational attainment and greater investment in R&D is significant in US states achieving higher Total Factor Productivity.

Thoughts?

Opinion – Can the world end extreme poverty? | Brookings Institution – John Gelmini

National Poverty Hearing 2006 at Westminster. ...

National Poverty Hearing 2006 at Westminster. A one-day National Poverty Hearing in Central Hall Westminster, held on Wednesday 6 December 2006, for up to 500 senior politicians, high-profile/influential policy makers and opinion formers in the media and public life and national and grassroots anti-poverty/civil society groups from across the United Kingdom. (Photo credit: Wikipedia)

Part of Charles Booth's poverty map showing th...

Part of Charles Booth’s poverty map showing the Old Nichol slum, including Bethnal Green Road (Photo credit: Wikipedia)

English: Cairo poverty

English: Cairo poverty (Photo credit: Wikipedia)

English: Flags in front of Council of Europe, ...

English: Flags in front of Council of Europe, including the Japanese one following the 2011 Japanese Earthquake (Photo credit: Wikipedia)

Sadly, organisations like Brookings, and pius and well meaning people since the dawn of time, have been wanting to eradicate poverty and failing miserably.

Dr Alf has it right and I would go further, and say that the only way people get out of poverty is by their own efforts, as evidenced by immigrants the world over, who transform their circumstances by doing things that indigenous populations refuse to do, and by leaving familiar things behind to take a massive chance and recreate a compelling future.

Campaigning organisations, charities, environmentalists and ‘do-gooders’ of every stripe, have tried to insert into the hearts and minds of people, the desire for self betterment. Social workers, psychologists, politicians and academics ponder the question but fail to arrive at the answer. I fear that the answer is the 80/20 rule, plus the burning desire to overcome difficulty, which very few people have as an innate God-given quality. It is not something that can be inserted by outsiders, taught by teachers or brought about by social workers.

Politicians who tax the rich more heavily and give houses to impoverished people also fail. One only has to look at slum dwellers from the London’s East End, whose houses were pounded into rubble, who were then rehoused in Stevenage New Town, Haverhill, Basildon and Harlow, in brand new houses in the 1960s. Practically all the houses have been turned into slums, where marital discord, domestic violence and drug-taking are rife and feral youths make the walkways and cycle paths a Mecca for muggers and petty criminals.

Unfortunately, you can take the person out of the slum but not the slum out of the person is an old saying that seems to hold good except in exceptional circumstances.

For a vivid illustration of failure to address poverty look at the African people at Calais, desperate to get to the UK, they have taken extreme risks, crossing the Mediterranean, and exhausting their modest savings paying for passage. They simply want a better life, with opportunities in a free country. The UK government seems powerless, and fearful of upsetting their French colleagues, who might move the Calais crisis to Dover. The recent Council of Europe meeting to address the immigration crisis across Europe was upstaged by the Greek financial crisis.

English: A boy from an East Cipinang trash dum...

English: A boy from an East Cipinang trash dump slum shows his find, Jakarta Indonesia. (Photo credit: Wikipedia)

So I conclude that the only real chance for the poor is to help themselves. They will take charity on offer and be wary of the politicians, police and bureaucrats.

John Gelmini