“In 2010/11, the incomes of the chief executives of the largest 100 companies in the UK increased by nearly 50% while the average pay rise in the private sector was just 2.7%. Because prices increased by 5.2%, most private sector workers actually became poorer and pay freezes meant that many public sector workers did even worse.
If we look at wealth, the picture is even more extreme – the Sunday Times Rich List reported that in a single year, 2010, the wealth of Britain’s 1,000 richest people increased by almost one third to a combined total of £395 billion.
This is all part of a long term trend. In the last thirty years the share of the national income going to wages and salaries fell, while the proportion going to profits rose. If the share had increased at the same rate as national income, incomes in the middle would now be nearly £3,000 higher.
This is not the end of the story. Not only did wage and salary earners receive a smaller share, but the way that share was split up became increasingly uneven. Most of it went to those already well paid. The highest paid 10% received incomes that were eight times higher than the lowest paid 10% in 1985 – by 2008 they were twelve times higher. It is also reported that income inequality has grown faster in the UK than anywhere else4. Now, the best off 10% receive 40% of total UK income, while the poorest 10% get 1%.”
This is an extract from a new pamphlet called “Why Inequality Matters” published by My Fair London in association with The Equality Trust. The pamphlet draws upon the evidence and the arguments in the book “The Spirit Level” which I have reviewed here.