Inequality likely to grow even sharper

A recurrent theme of the political postings on this blog is that inequality of income and wealth in the UK (and even more so the USA) is too sharp, that on current policies is likely to become even sharper, and that such deep inequality produces poor social outcomes for those at all levels of income. These arguments are particularly well evidenced in the book “The Spirit Level” which I have reviewed here.

A new report shows that the middle class in Britain is being hollowed out (this is even truer of the United States) and that, when the UK economy recovers, economic growth will further accentuate the division between rich and poor in our society – unless we promote new political policies.

The report is called “Who Gains From Growth? Living Standards In 2020” and it is published by the Resolution Foundation. The findings are the work of the independent and respected Institute for Fiscal Studies (IFS) and the Institute for Economic Research (IER).

What policies might alleviate these pernicous trends? The report sets out a number of them including more investment in vocational education, heavily subsidised childcare, and the mandation of a living wage,¬†You can read an editorial in today’s “Observer” newspaper summarising the issues here and you can access the full report here.


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