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What compounding inequality? The UK's Gini coefficient has been trending downwards since the global financial crisis. 14 years of Conservative government made

What compounding inequality? The UK's Gini coefficient has been trending downwards since the global financial crisis. 14 years of Conservative government made this country more equal, not less, because they flattened the income distribution by making everybody poorer. The big pattern among rich people in the UK nowadays is not that they're getting richer, it's that they're leaving.

rhubarbtree 1y ago
You’re looking at the wrong numbers. Wealth, not income. Wealth inequality is through the roof. Poverty is through the roof. More people using food banks than ever. More people on zero hours and low paid contracts. If you think the problem with the UK is that rich people are leaving, then you have no idea about the reality of living in the UK. Visiting some of the towns in this book would be a starting point.
- chgs 1y ago
  The problem in the U.K. is the availability of housing.
  - arrowsmith 1y ago
    If only our problems could be reduced to a single "the".
    - chgs 1y ago
      Pretty much all other problems stem from that. Well there’s the weather I guess.
- arrowsmith 1y ago
  > Poverty is through the roof. More people using food banks than ever. More people on zero hours and low paid contracts. Is that supposed to prove me wrong? I said that everybody is getting poorer. > Wealth inequality is through the roof. Wealth inequality, while high, is still roughly where it was in 2007. (Source: https://equalitytrust.org.uk/scale-economic-inequality-uk/ https://equalitytrust.org.uk/scale-economic-inequality-uk/) > If you think the problem with the UK is that rich people are leaving I said it's a problem, not the problem. And it's not just the ultra-rich who are leaving, but vast swathes of the middle classes. Many poor people would leave too if they had the means. You and the other replier seem to think I'm defending the status quo. How on earth did I imply that? You think I think it's a good thing for the entire country to get poorer?
  - a_dabbler 1y ago
    "Wealth inequality, while high, is still roughly where it was in 2007" This is not whats represented in the source you cited? In the graph titled "Top 10% and Bottom 50% Wealth Shares in The UK 1900-2020" you can clearly see the wealth owned by the top 10% increased from 54.4% in 2007 to 57% in 2020 and likely even higher now 5 years later.
    - arrowsmith 1y ago
      Yes, that's only a 2.6% increase. I don't think it's unfair to call that "roughly where it was". In fact, according to that chart wealth inequality today is much lower than it was in the 1970s, although it increased throughout the 1990s. The same link shows that the UK has unremarkable wealth inequality by the standards of developed countries: we're bang in the middle of the OECD, with lower levels of wealth inequality than Sweden, Denmark, Finland or Norway. (That's funny, I thought the Nordics were egalitarian utopias?) I'm not saying that wealth inequality is low, or that it's not a problem. I'm merely responding to the claim that "wealth inequality is through the roof", which I take to mean that wealth inequality has increased substantially in recent years. As far as I can tell that's not true. Personally I think we need more economic growth, not more taxes. We already have the highest taxes since WWII, soon to be the highest taxes in the entire history of the UK, and all it's doing is strangling the economy and making productive people flee.
      - disgruntledphd2 1y ago
        Look, I'm not gonna dispute that the tax system is messed up in the UK (Student loans, the cutting off of credits at 100k and the lack of a real property tax) but fundamentally as a society ye blew mineral wealth on tax cuts then removed yourselves from a giant trading bloc, so the lack of services and higher tax rates are unsurprising. Ultimately though, tax on income should be lowered and tax on property should be proportionately increased, given that property is the source of much wealth and is very difficult to hide or move.
    - stavros 1y ago
      Right, but the maximum is 92.7% and the minimum is 46%. A 3% difference seems small enough to be noise.
PaulRobinson 1y ago
Go get an airbnb in a poor suburb for a few weeks and live there, talk to people, and ask them if they think they're more or less equal with other Britons in the last 15 years. Show them your Gini coefficient and see what they think of it. Ask them if they feel the income distribution has been flattened in a way that favours them. The rich people living here for the last 40 years all leaving does not bother most people. In fact, it's cause for celebration. They're leeches who don't pay tax on their piles of cash held in off-shore accounts - they just drive up the price of everything, particularly property. Meanwhile there are plenty of people trying to get here from the US to replace them who understand the purpose of capital is to put it to work and create jobs, not stare at it on a screen. Your kind of thinking is not unusual within centre right politics, but it's also why nationalist populism is a credible threat. Farage is currently favourite with most bookmakers to be next PM because of the kind of defence of Tory policy you're making. Please think on that.
- arrowsmith 1y ago
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deleted 1y ago
[deleted]
chgs 1y ago
The major change to income levels has been the massive increase in minimum wage. This removes the incentive to work hard and get skills because they aren’t valued, especially outside of London. The other major change is the continual divergence of wealth. If you are a 20 year old living near London you can get a crap paying junior job and live rent free for 5 years with parents while you save a 100k deposit (which using things like LISAs). By the time you’re in your early 30s you have a decent paying job, have met a partner with a similar income, and can buy a house and repeat the cycle. If you don’t you get the same job but have to pay rent to someone else’s parents, and you never get that deposit, so you’re trapped in the rent cycle.
- arrowsmith 1y ago
  We've also seen a huge compression in net income as the tax thresholds haven't kept up with inflation. So someone who paid a 20% marginal rate twenty years ago is now paying 40% on the same real-terms income. And the 0% personal allowance has been eroded too. Not to mention the 60% effective marginal rate between £100k and £125k - 69% if you have student debt, oh and that's not even counting employee's NICs. And don't get me started on the stealth tax that is employer's NICs. (Those were just increased even further, and the morons are all defending it by pretending it doesn't come from wages... where exactly do they think the employer gets the money from?) Plus all the insane traps where earning extra money can actually reduce your net income. E.g. there are situations in which increasing your salary by £1 can leave you thousands of pounds poorer because certain benefits are withdrawn with a cliff. What's the point in working harder? You'd think that with such eye-wateringly high levels of taxation, we'd at least have something to show for it in the public sector, but... okay, I need to stop writing now for the sake of my blood pressure.
  - chgs 1y ago
    Everyone goes on about the 100k issue. For 10 years I paid 60% between 50 and 60k due to child tax. The child tax has recently shifted to between 60k and 80k and reduced so it’s now about 51% (plus student loans)
- taurath 1y ago
parpfish 1y ago
We’re talking about inequality between regions/towns, not individuals. Do to self selection and sorting, you could have a situation where individual level inequality is unchanged but the geographical disparities change

rhubarbtree 1y ago

You’re looking at the wrong numbers. Wealth, not income. Wealth inequality is through the roof. Poverty is through the roof. More people using food banks than ever. More people on zero hours and low paid contracts. If you think the problem with the UK is that rich people are leaving, then you have no idea about the reality of living in the UK. Visiting some of the towns in this book would be a starting point.

chgs 1y ago
The problem in the U.K. is the availability of housing.
- arrowsmith 1y ago
  If only our problems could be reduced to a single "the".
  - chgs 1y ago
    Pretty much all other problems stem from that. Well there’s the weather I guess.
arrowsmith 1y ago
> Poverty is through the roof. More people using food banks than ever. More people on zero hours and low paid contracts. Is that supposed to prove me wrong? I said that everybody is getting poorer. > Wealth inequality is through the roof. Wealth inequality, while high, is still roughly where it was in 2007. (Source: https://equalitytrust.org.uk/scale-economic-inequality-uk/ https://equalitytrust.org.uk/scale-economic-inequality-uk/) > If you think the problem with the UK is that rich people are leaving I said it's a problem, not the problem. And it's not just the ultra-rich who are leaving, but vast swathes of the middle classes. Many poor people would leave too if they had the means. You and the other replier seem to think I'm defending the status quo. How on earth did I imply that? You think I think it's a good thing for the entire country to get poorer?
- a_dabbler 1y ago
  "Wealth inequality, while high, is still roughly where it was in 2007" This is not whats represented in the source you cited? In the graph titled "Top 10% and Bottom 50% Wealth Shares in The UK 1900-2020" you can clearly see the wealth owned by the top 10% increased from 54.4% in 2007 to 57% in 2020 and likely even higher now 5 years later.
  - arrowsmith 1y ago
    Yes, that's only a 2.6% increase. I don't think it's unfair to call that "roughly where it was". In fact, according to that chart wealth inequality today is much lower than it was in the 1970s, although it increased throughout the 1990s. The same link shows that the UK has unremarkable wealth inequality by the standards of developed countries: we're bang in the middle of the OECD, with lower levels of wealth inequality than Sweden, Denmark, Finland or Norway. (That's funny, I thought the Nordics were egalitarian utopias?) I'm not saying that wealth inequality is low, or that it's not a problem. I'm merely responding to the claim that "wealth inequality is through the roof", which I take to mean that wealth inequality has increased substantially in recent years. As far as I can tell that's not true. Personally I think we need more economic growth, not more taxes. We already have the highest taxes since WWII, soon to be the highest taxes in the entire history of the UK, and all it's doing is strangling the economy and making productive people flee.
    - disgruntledphd2 1y ago
      Look, I'm not gonna dispute that the tax system is messed up in the UK (Student loans, the cutting off of credits at 100k and the lack of a real property tax) but fundamentally as a society ye blew mineral wealth on tax cuts then removed yourselves from a giant trading bloc, so the lack of services and higher tax rates are unsurprising. Ultimately though, tax on income should be lowered and tax on property should be proportionately increased, given that property is the source of much wealth and is very difficult to hide or move.
  - stavros 1y ago
    Right, but the maximum is 92.7% and the minimum is 46%. A 3% difference seems small enough to be noise.

PaulRobinson 1y ago

Go get an airbnb in a poor suburb for a few weeks and live there, talk to people, and ask them if they think they're more or less equal with other Britons in the last 15 years. Show them your Gini coefficient and see what they think of it. Ask them if they feel the income distribution has been flattened in a way that favours them. The rich people living here for the last 40 years all leaving does not bother most people. In fact, it's cause for celebration. They're leeches who don't pay tax on their piles of cash held in off-shore accounts - they just drive up the price of everything, particularly property. Meanwhile there are plenty of people trying to get here from the US to replace them who understand the purpose of capital is to put it to work and create jobs, not stare at it on a screen. Your kind of thinking is not unusual within centre right politics, but it's also why nationalist populism is a credible threat. Farage is currently favourite with most bookmakers to be next PM because of the kind of defence of Tory policy you're making. Please think on that.

arrowsmith 1y ago
[flagged]

deleted 1y ago

[deleted]

chgs 1y ago

The major change to income levels has been the massive increase in minimum wage. This removes the incentive to work hard and get skills because they aren’t valued, especially outside of London. The other major change is the continual divergence of wealth. If you are a 20 year old living near London you can get a crap paying junior job and live rent free for 5 years with parents while you save a 100k deposit (which using things like LISAs). By the time you’re in your early 30s you have a decent paying job, have met a partner with a similar income, and can buy a house and repeat the cycle. If you don’t you get the same job but have to pay rent to someone else’s parents, and you never get that deposit, so you’re trapped in the rent cycle.

arrowsmith 1y ago
We've also seen a huge compression in net income as the tax thresholds haven't kept up with inflation. So someone who paid a 20% marginal rate twenty years ago is now paying 40% on the same real-terms income. And the 0% personal allowance has been eroded too. Not to mention the 60% effective marginal rate between £100k and £125k - 69% if you have student debt, oh and that's not even counting employee's NICs. And don't get me started on the stealth tax that is employer's NICs. (Those were just increased even further, and the morons are all defending it by pretending it doesn't come from wages... where exactly do they think the employer gets the money from?) Plus all the insane traps where earning extra money can actually reduce your net income. E.g. there are situations in which increasing your salary by £1 can leave you thousands of pounds poorer because certain benefits are withdrawn with a cliff. What's the point in working harder? You'd think that with such eye-wateringly high levels of taxation, we'd at least have something to show for it in the public sector, but... okay, I need to stop writing now for the sake of my blood pressure.
- chgs 1y ago
  Everyone goes on about the 100k issue. For 10 years I paid 60% between 50 and 60k due to child tax. The child tax has recently shifted to between 60k and 80k and reduced so it’s now about 51% (plus student loans)
taurath 1y ago

parpfish 1y ago

We’re talking about inequality between regions/towns, not individuals. Do to self selection and sorting, you could have a situation where individual level inequality is unchanged but the geographical disparities change