30 years of ‘Market knows best’ have damaged fairness
The final report of the National Equalities Panel (NEP), “An Anatomy of Economic Inequality in the UK” is out today – you can download the full thing or exec summary from the Government Equalities Office website. It’s an exceptional piece of work, describing in graphic detail just how unfair and unequal our society has become thanks to ‘market knows best’ policies.
This sad story began in the 1980s when inequality really took hold, but even in recent years the best that can be said is that it hasn’t got any worse. We have now tested to destruction the theory that wealth trickles down – it doesn’t. Instead growing inequality destabilises the wider economy, leaves a substantial proportion living in real poverty and undermines the social cohesion that provides a large part of what makes for a good fulfilling life.
It cannot be right that as we look to rebuild our economy, a non-English name can still count against someone on their CV and that the only group of women to have any career progression in wages when they reach their 30s are highly qualified public sector workers.
The super-rich and powerful have a vested interest in closing down any debate about inequality by talking of the ‘politics of envy’ or ‘core vote strategies’. But inequality damages the economy and society for the vast majority of the population. Politicians of every party must now meet the challenge set by this devastating analysis.
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Filed under: Equality, Inequality
“We have now tested to destruction the theory that wealth trickles down – it doesn’t.”
Have you actually bothered to read the report?
Chapter 2 shows that incomes for the tenth percentile (hey, that’s the way they’ve measured it) have risen by 50% over the decades. That is an increase in income to the poor….
If wealth did *not* trickle down then that increase would be negative, wouldn’t it, a decrease?
Tim,
Around footnote 28 of the report, there is a reference to weekly earnings in the 90th percentile growing from 1.7 times the median in 1977 to 2.2 in 2001; while at the 99th percentile earnings grew from 2.9 times to 4.8; while for the top 0.5% it grew from 3.4 times to nearly 6.
That doesn’t look like a successful argument for ‘trickle down theory’ to me.
Umm, incomes of the rich went up a lot. Incomes of the poor went up by less.
This proves that rising incomes for the rich do not increase incomes for the poor in what manner?
A rising disparity between the share of incomes taken by the richest as compared to the share taken by the poorest is not evidence of wealth trickling down, regardless of any increases within each group on the original starting point.
An increase in wealth within a group resulting from investment and wealth creation activity is always a welcome benefit of such activity – but a rising disparity in the levels of wealth held by one group comparative to another is not evidence that wealth is trickling down.
“Trickle down” theory doesn’t state that wealth literally trickles down from the rich to the poor.
Rather, it states that if by leaving people alone to create more wealth, the rich get richer, the poor will too.
Yes, I know the theory – economically, as well as in the real world, it’s a widely discredited one not least since the usual application of justifications for trickle down is in the area of tax cuts for the rich. And rising inequalities are evidence that a fair share is not being paid here either.
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