I know that there is little point in taking on the Melanie Phillips leviathan. But I can’t resist quoting this from her column yesterday:

Similarly, the Government seems to have redefined ‘middle income’ to mean people on very modest means who aren’t actually on the breadline – while the actual middle classes have been rebranded as the ‘ privileged’, who can therefore be clobbered.

Surely there are only two possible definitions of middle income - either someone earning around median income – or someone living in a household on median income. And as these two figures are very similar (at around £21,000 or so) there is not very much point in arguing about this. “People on modest means who aren’t on the breadline” is a pretty good definition of the real middle Britain. Read more »

   Filed under: Middle Britain | 1 Comment »

The BBC is reporting that the Prime Minister is to

say Labour will create “more middle class jobs than ever before” and the party represents the “mainstream majority”. And he will suggest middle class voters would suffer disproportionately under Tory plans to cut public spending. In the past, Mr Brown’s opponents have accused him of waging a class war.

But on the radio coverage it is also reported that allied to this is a call by Lord Mandelson for the 50p top rate tax to be lifted as soon as possible.

The media and politicians of all parties are very confused by class. In a common-sense world where words mean what they are meant to, middle would mean half way between top and bottom. That puts someone middle class on about £21,000 a year. Indeed this is what US politicians mean by middle class – the great mass of working joes and joannas who are not poor but earn well short of what we would call the professional middle classes. Read more »

   Filed under: Inequality, Middle Britain, Social mobility, Tax | 1 Comment »

There are some new interesting official stats about the distribution of wealth – even if they were collected before the recession bit. The top line is that the least wealthy half of the population earn just 9% of the nation’s wealth, while the top 20% own 62% of privately held wealth. The bottom ten per cent own negative wealth – i.e. they owe more than they own.

The top 10% of households were 2.4 times wealthier than the next richest 10%, and 4.8 times wealthier than the bottom 50%.

Perhaps the most surprising finding is that 5% of households own personalised number plates – perhaps the stand-out definition of having more money than sense. The report says “only five”. I’m surprised it’s that high, but perhaps they are big among statisticians (and I am sure there are some good jokes about what would make a good number plate for a stats geek). Read more »

   Filed under: Inequality, Middle Britain, Pensions | 2 Comments »

Rising personal debt, global imbalances, excessive bank leveraging and reckless financial risk-taking all played a key part in the current economic meltdown. But there is another factor that has been largely ignored – the role of wages which I explore in the first Touchstone Extra - Unfair to Middling:  How Middle Income Britain’s Shrinking Wages Fuelled the Crash and Threaten Recovery, which is published today.

In the 25 years from 1945, the share of the nation’s output going to wages held steady at close to 60% before rising to nearly 65% in 1975. Since that high point, the wage share has been in inexorable decline. Today it stands at a mere 53%. An even steeper fall has occurred in the United States, while continental Europe has experienced a shallower fall.
Read more »

   Filed under: Earnings, Economics, Financial crisis, Middle Britain | 2 Comments »

As regular visitors to this site know, the TUC has made a big splash over the last few months on the issue of Middle Income Britain.  The PM’s speech today drew on many of the themes we have been pressing.  Two sections of the speech particularly stood out: Read more »

   Filed under: Middle Britain, Politics | Comments Off

In the ToUChstone pamphlet, Life in the Middle, I argued that the term ‘middle Britain’ has come to be commonly used by the political and media classes to describe a group that sits in the upper half of the income distribution. Indeed ‘middle Britain’ has increasingly become shorthand for the professional middle classes. Yet an objective definition of the term ‘middle Britain’ would be the social group clustered around the mid-point of the income distribution, the point statisticians call ‘the median’.

In addition, people have been found to have a very poor idea of where they rank in the income hierarchy. To find out how good individuals are at placing themselves, the TUC made a ‘MiddleBritainometer‘ inviting respondents to guess where they stand in the pay league. Over 2000 people have responded and their guesses can be compared with their actual position in the pay league in the results posted here. Read more »

   Filed under: Earnings, Inequality, Middle Britain | 1 Comment »

Our MiddleBritainometer has been doing a great trade since we launched it. I’ve just been looking at the stats it’s thrown out, to see how close people are on average to guessing where they fit on the UK incomes spectrum.

Basically we’re not that great at it. On average, people placed themselves worse off than they really were by 15.6 percentage points.

Read more »

   Filed under: Earnings, Middle Britain | 1 Comment »

The Guardian deserves much praise for Polly Curtis’s story today finding that 50% of private school pupils get A grades in their A levels. Polly writes that this is:

“prompting claims that attempts to break the middle-class stranglehold on entry to higher education have failed this year.” (our emphasis).

But going to private school does not put you in the middle of anything. Read more »

   Filed under: Inequality, Media, Middle Britain, Social mobility | 7 Comments »

The TUC Touchstone pamphlet, Life in the Middle, received wide media coverage on its launch last week. There were half page analyses in the Financial Times and The Guardian and news reports in The Daily Telegraph, The Daily Express and The Daily Mail and a very detailed analysis on the BBC website.  The Daily Express and Daily Mail also dedicated full page columns by their lead political columnists to the pamphlet, The Daily Mirror’s Kevin Maguire covered it and The Observer also had a column on Life in the Middle describing the pamphlet as “rich and fascinating” .  Read more »

   Filed under: Blogging, Inequality, Labour market, Middle Britain, Tax | 2 Comments »

Many MPs seem bemused by the wave of public anger that has consumed them in recent days.  Here’s a simple statistic that might enlighten them.  Median income in the UK is around £20,000 pa;  MPs earn around £65,000 pa.  And as the new Touchstone pamphlet shows, many middle earners have seen their relative income growth stall and their job status decline in the last two to three decades.  Read more »

   Filed under: Economics, Middle Britain, Politics | 2 Comments »