Transcript Document

Inequality in the UK
Ruth Lupton
Presentation at New Economy: 19th June 2014
Outline
• Trends in inequality, what’s causing them and why we
should be worried
• Inequality and local governance: some ideas
What is and what is not covered
• IN:
• Economic inequality (income and wealth)
• The overall shape of the distribution, gaps between top,
middle and bottom
• OUT:
• Economic inequalities between groups – e.g. men and
women, old and young, Indian and Pakistani heritage
• Non-economic inequalities – health, education,
recognition, treatment etc
Norway
Denmark
Finland
Belgium
Austria
Sweden
Luxembourg
Germany
Netherlands
France
Italy
1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
Canada
Australia
Greece
Spain
United Kingdom
Portugal
United States
Gini Coefficient 2010
(After Taxes and Transfers)
The UK is a high inequality country
(compared with EU 15 and other major Anglophone comparators)
UK Gini 0.341
Source: OECD
Gini coefficient
(after taxes, transfers, before housing costs)
The major increase came in the 1980s
Not a lot has happened since
0.50
0.45
0.40
0.35
0.30
0.25
0.20
0.15
0.10
0.05
0.00
Source: Institute for Fiscal Studies
What’s explaining the trend?
ESSENTIALLY:
Inequality is a feature of global late capitalism not the product of any particular
government
• The emergence of the super-rich
• The growing professional/middle class in knowledge jobs
• The decline in ‘middle’ jobs – craft, trade ,clerical, supervisory
• The increase in ‘bottom’ jobs – service sector. Stagnating or falling
wages at the bottom
BUT:
Government can affect these trends (pre-distribution)
As well as maintaining levels of benefits and taxing middle and top incomes
Norway
Netherlands
Denmark
Sweden
Canada
Luxembourg
Australia
Belgium
Finland
Austria
Germany
United States
Italy
France
0.8
Spain
Greece
Portugal
United Kingdom
Gini Coefficient
(Before Taxes and Transfers)
The UK has high pre-tax and pre-transfer
inequality
1
0.9
UK Gini 0.523
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
Source: OECD
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993-94
1995-96
1997-98
1999-00
2001-02
2003-04
2005-06
2007-08
2009-10
2011-12
Ratio Before Housing Costs
It’s not all about the super-rich
2.4
2.2
2.0
1.8
1.6
1.4
1.2
1.0
50/10 ratio
90/50 ratio
Source: IFS
Wealth Inequality is much greater than income
inequality (although less targeted by policies)
• 90:10 ratio for wealth around 100:1 (compared with 4:1 for incomes)
• The wealth to income ratio has grown rapidly since the 1970s.
• So/but wealth inequality is much more stable than income inequality
(in fact falling on some measures)
• BUT, absolute gaps are huge, and widening
Source: IFS
Why should we be worried about inequality?
The main arguments:
•
•
•
•
Bad for health and social outcomes (Wilkinson and Pickett)
Bad for the soul and for social cohesion (Dorling)
Bad for social mobility (and therefore for all the above)
Bad for the economy, in certain forms (Picketty)
But we aren’t clear about mechanisms ….
• Status anxiety (depends on reference points)?
• Material advantage/disadvantage ?
• Separation/separated lives/lack of common identity
Or about which inequalities matter…
• The very top compared with everyone else (symbolically and
through their effects on housing markets)?
• The rich compared with the rest ?
• The middle compared with the ‘left behind’ poor and the new poor
‘precariat’
• Wealth rather than income, because it
• Generates income inequality
• Enables investments that embed spatial divisions (eg houses)
and block social mobility (eg private education)
Or how much spatial inequalities matter …
• Is rising inequality within cities a problem, or are the mechanisms
national ones?
• Is it worse if poverty/wealth are cheek by jowl or if they are
separated?
Why is the inequality debate in a muddle?
• Partly because we don’t have enough evidence of cause and effect
• Mainly because widening inequality cannot be considered only as
economics:
• It shapes the way we relate to one another, think about one
another, and organise our activities and spaces. These effects
are complex and multi-scalar
• These modes of thinking and doing enable/justify/normalise
continued inequality.
Addressing widening inequality at a local
level
• If we accept that widening inequality is a product of the kind of
growth we have encouraged, but may also be bad for us in
numerous ways, what is to be done?
• I will:
• Focus on the local
• Try to think about the non-economics as well as the economics
An economic role for local governance in
addressing widening inequality
• Building pre-distributive economies
• Promoting sectors with middle jobs and making sure local
people are trained up to get them
• Promoting living wages AND reduced wage-gaps, including
through procurement
• Encouraging ‘good jobs’ with good conditions, training and
progression and work-life balance
A broader agenda: The Good City (Amin 2006)
“An urban ethic imagined as an ever-widening habit of solidarity built
around different dimensions of the urban common weal”
“nudging the urban public culture towards outcomes than benefit the
more rather than the few” ….“the result is the city that learns to live
with, perhaps even value, difference, publicise the commons, and
crowd out the violence of an urbanism of exclusionary and privatised
interest”
Source: Amin, A. (2006) The Good City. Urban Studies 43 5/6 pp 1009-1023
Could we, with a stronger imaginary of what a city is, create one less likely
to produce economic inequality and more likely to mitigate its effects?
Elements of The Good City
Four registers of urban solidarity:
• Repair and maintenance of “the silent republic of things that make
cities work”
• universal access to shelter, sustenance, mobility etc
• technology – digital access and inclusive/exclusive practices
• Relatedness – equal duty of care to insider/outsider,
mainstream/margins. Ending the “nasty politics of hate”. Extending
the shared commons.
• Rights – to shape, experience and benefit from urban public life
(including being able to live in the city)
• Re-enchantment – civic sociability in public spaces, public art etc.
An non-economic role for local governance
in addressing widening inequality?
• Re-distribution through ‘the social wage’
• Subsidised housing, childcare, health, education, transport
• A different language of governance
• An emphasis through design, subsidy and partnership, on shared
spaces, shared endeavours
• Educating for different economic decisions in the future
• An economic citizenship curriculum?
• A high quality vocational education
• Common schools.
Tensions: between growth and equality, between targeting and
universalism
Is the time ripe for a new local politics of
greater equality?
"We understand that allowing
the income gap to stretch
further isn't simply a threat to
those at the bottom but to every
New Yorker.“
What would it look like here?