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.