Does inequality matter?

In May 2011, the High Pay Commission reported that, if current trends continue, by 2030 the highest 0.1% of earners in the UK will see their remuneration rise to 140 times average income. The last time someone in the top tenth of one per cent of the income distribution was deemed to be worth 140 other people was when we had a fully functioning aristocracy and Queen Victoria was on the throne.

In 1998, Peter Mandelson stunned many of us on the left by declaring: "We are intensely relaxed about people getting filthy rich". Maybe that didn’t seem to matter so much in the good times; the UK economy grew continuously from 1995 until 2008, the longest period of sustained growth for at least 200 years. Inequality in Britain is the fourth highest in the developed world, after the USA, Portugal and Singapore, but in those good years most people were slightly better off than previously, and public services, which the poor use more than the rich, were receiving vast injections of cash. Under thirteen years of Labour rule (1997-2010), spending on the NHS trebled and spending on education doubled. (Despite all the Tory lies to the contrary, the percentage of our GDP spent on welfare actually fell between 1997 and 2008.) So does it matter if some are much, much better off than most?

Economically, Britain was at its most equal ever in either 1968 or 1976, depending on which figures you use. Inequalities have been rising since Thatcher became Prime Minister in 1979. The highest paid 10% received incomes that were eight times higher than the lowest paid 10% in 1985 – by 2008 they were twelve times higher. It is also reported that income inequality has grown faster in the UK than anywhere else. Now, the wealthiest 10% receive 40% of total UK income, while the poorest 10% get 1%. Since 1979, the share of the national income going to wages and salaries has fallen, while the proportion going to profits has risen. If the share had increased at the same rate as national income, incomes in the middle would now be nearly £3,000 higher.

Just before he became Deputy Prime Minister, Nick Clegg lamented that between 1997 and 2007 the wealthiest 20% had seen their post-tax incomes rise so much more than others that they were receiving 7.2 times the incomes of the poorest 20% by the time Tony Blair left office (as opposed to 6.9 times as much when he became Prime Minister). Before he weedled his way into power with Clegg’s help, David Cameron commented on ‘The Spirit Level’, a book by Richard Wilkinson and Kate Pickett. He said it showed "that among the richest countries, it's the more unequal ones that do worse according to almost every quality-of-life indicator". That implied that he thinks inequality does matter, but much of what his vicious government has done has only made things more unequal.

The 2011 statistics from the Institute of Fiscal Studies (IFS) suggested that inequalities were increasing substantially again and in a far shorter period of time, not least because incomes at the bottom are now falling in real terms. An IFS report in September 2011 revealed that the least well off 20% of British households will lose 6% of their income per year between 2011 and 2014 due to government cuts. The charity ‘Save The Children’, best known for helping some of the world's poorest families, has now launched an appeal to help UK children. The charity says the UK's poorest children are bearing the brunt of the austerity measures, with some missing out on regular hot meals or new shoes. IFS figures estimate that there are 3.5 million children living in poverty in the UK and predict a steep rise in the numbers in coming years.

Meanwhile, the 1,000 richest people in Britain saw their average personal wealth rise from £336 million each in 2010 to £369 million by 2011, and then to £414 million by 2012. In 2010/11, the incomes of the chief executives of the largest 100 companies in the UK increased by nearly 50%, while the average pay rise in the private sector was just 2.7%. Because prices increased by 5.2%, most private sector workers actually became poorer and pay freezes meant that many public sector workers did even worse. Author and commentator Owen Jones has written: “The coalition’s mantra that ‘we’re all in this together’ has shifted between the ludicrous and the offensive ever since it came to power: while the average Briton faces the most protracted squeeze in living standards since the 1920s, the Sunday Times Rich List reveals an ever-booming elite.”

The only countries (for which there are comparable statistics) in which the richest 1% ‘earn’ more than in Britain are Argentina, Singapore, South Africa and the USA. In Finland, France, Japan, New Zealand, Norway and Spain the richest 1% earn only nine times average earnings (or less) – in Switzerland only 7.8 times; in Sweden 6.7 times; and in the Netherlands only 5.4 times the average income. As Professor Danny Dorling says: “The Swiss have bankers, the Swedes industrialists, and the Dutch host multinational companies; they all just don’t tolerate such excess.”

Admittedly it’s in a different economic climate, but Ed Miliband clearly isn’t so “relaxed” as Mandelson was about the filthy rich. In September 2010, in his first major speech as Labour leader, Ed said: "I do believe this country is too unequal and the gap between rich and poor doesn't just harm the poor, it harms us all." Greater inequality does matter. Owen Jones argues that inequality weakens social cohesion and a sense of community, and produces more crime and violence. He quotes the example of the riots of August 2011, pointing out that London is one of the most unequal cities on earth, where the richest 10% receive 273 times more than the poorest 10%.

It’s ironic that greater inequality, which right-wing policies always cause, increases the need for big government, which right-wing politicians so detest. Inequality creates the need for more police, more prisons and more health and social services of every kind. (The USA imprisons people at fourteen times the rate of Japan, the UK some five times.) Most of these services are expensive and only very partially effective.

Most companies produce goods or services for the general public, such as houses, clothes, household goods, foodstuffs and insurance. When wealth is concentrated in the hands of fewer people, demand falls; the rich might buy luxury goods, but not enough of the things that most companies offer. Increasing inequality means that many can no longer afford to consume, or can only do so by getting into too much debt, as in the USA subprime mortgage crisis that sparked off the global crunch. Borrowing works for a while, but not for ever. Where no one can borrow any more money, goods and services cannot be sold, factories and businesses close, jobs are lost, and the world goes into recession.

Professor Dorling sums up: “Pay restraint at the top saves more money than any programme of government cuts to public sector jobs can ever achieve. Pay and benefit increases at the bottom are the most efficient means of increasing consumer demand. It was redistribution of wealth which changed this country from thirties misery to swinging sixties.”

Sources used:-

http://www.newstatesman.com/society/2010/11/inequality-social-health-essay

http://classonline.org.uk/docs/Why_Inequality_Matters.pdf

http://www.bbc.co.uk/news/education-19478083

http://www.newleftproject.org/index.php/site/article_comments/rack_of_inequality

Shouldn't you delete this thread as unsuitable (too long) which breaks your LAW Ivan>

No, because Ivan wrote the post. I checked. It only counts when you copy/paste an article someone else wrote.

Inequality should be adjusted by a Nation's tax system, but even a Socialist government needs to be careful not to kill the goose that lays the golden eggs. Gideon nailed his colours to the mast with his decision to scrap the top rate of tax. In just a few days he will unveil a whole new plan enabling the wealthy to prosper.

Inequality should be adjusted by a nation's tax system

That hits the nail on the head. When the UK, economically, was at its most equal ever in the 1970s, the standard rate of income tax was 33% and VAT was 8%. Now both are 20%. VAT takes no account of a person’s ability to pay and hits the poorest in society disproportionately. In the 1970s, local taxation consisted of the domestic rate, where every house was valued individually and the sky was the limit. Now local taxation consists of the council tax, where properties are lumped together in bands and for which there is an upper limit. Inheritance tax started on estates worth more than £15,000 in 1977, today the figure is £325,000.

Inequality is not just unfair, it has other ramifications. The Nobel Prize-winning economist Paul Krugman has demonstrated that there is a link between inequality and financial crises. He says that it’s no accident that both major modern crises – the first beginning in 1929, the second in 2008 – coincided with historic levels of inequality. Robert Reich, the former US Secretary of Labour, explained: “The problem wasn’t that consumers lived beyond their means. It was that their means didn’t keep up with what the growing economy was capable of producing at or near full-employment. A larger and larger share of total income went to the people at the top.”

Richard Wilkinson, a co-author of ‘The Spirit Level’, argues that inequality leads to increases in debt. Using statistics from 1963 to 2003, the economist Matteo Iacoviello has shown a very close correlation between increasing debt and increasing inequality in the USA and concludes that the longer-term increases in debt can only be explained by the rise in inequality. Growing inequality meant that, in the years before the 2008 crash, about $1.5trn per year was being siphoned from the poorest 90% of the US population to the richest 10%.

It appears that inequality has other consequences. The UK has the fourth lowest life expectancy out of the 23 most developed countries. The three countries that have even lower life expectancy are those with even greater income inequality – Portugal, the USA and Singapore. On the other hand, Norway, Sweden, Denmark and Finland have the highest rates of social mobility and are among the most equal of developed nations. The USA has the lowest level of social mobility recorded, followed by the UK. In both countries social mobility increased as differences in income decreased after World War Two, then it declined as the income gap widened from the 1980s onwards.

Sources used:-

http://www.hmrc.gov.uk/rates/iht-thresholds.htm

http://www.newstatesman.com/society/2010/11/inequality-social-health-essay

http://classonline.org.uk/docs/Why_Inequality_Matters.pdf

Very interesting points, Ivan.
In my rather more simplistic analysis, I think fair distribution of assets should follow the old formula of 'from each according to his means to each according to his needs', which probably involves no-one being so rich that he can be utterly ignorant of the circumstances of those with less

Before he weedled his way into power with Clegg’s help, David Cameron commented on ‘The Spirit Level’, a book by Richard Wilkinson and Kate Pickett.

You can read a review of that book here:-
http://belleadonna.wordpress.com/2011/02/28/richard-wilkinson-kate-pickett-%E2%80%93-the-spirit-level/

Richard Wilkinson is also a non-executive co-director of the Equality Trust:-
http://www.equalitytrust.org.uk/

Good to get back on track.

All animals are equal, but folk like Henry Ford are more equal than others. It's the American Way.

How many times have we heard the evil Bastard Iain Dumkopf Schmidt ( fascist Translation) tell us how annoyed we all are whilst on our way to work, when we see rows of closed curtains, and that these closed curtains where hiding “benefit scroungers“.

LOL! Someone actually said that? Now there's desperation for you.

I guess if you're not on benefits, you should have your curtains open all the time. Hell, may as well find a top hat and cane and do a dance number in the window as people walk by and look inside of your home. No one draws their curtains for simple privacy, of course. That would be unheard of!

I can assume, then, that if I walk by Schmidt's home, all of his curtains will be wide open, even at night, so I can stand outside and watch everything he does in the privacy of his own home? Because if I can't watch him take a shit on his toilet while I stand out on the street, I'm going to assume that he, too, is a "benefit scrounger."

Just as Hitler demonised the Jews, the current fascist government in Britain is doing its best to make scapegoats of disabled and unemployed people. The Tories aim to set the working poor against those who can’t work for one reason or another (maybe because the Tories have destroyed their jobs), in order to deflect attention away from their own failings.

George Osborne stood up at the Tory Party conference in October and said: “It is unfair that people going out to work see the neighbour next door with the blinds down because they are on benefits."

http://www.newstatesman.com/blogs/star-spangled-staggers/2012/10/george-osborne-doesnt-it-if-your-blinds-are-down-morning

http://www.guardian.co.uk/politics/blog/2012/oct/08/curtains-closed-blinds-down-george-osborne

I wasn’t aware that Iain Duncan Smith had also committed this hate crime, but nothing would surprise me. He is on record as saying on breakfast TV: “Work makes you free.” That was the slogan which was put above the entrance to Auschwitz in 1940 – “Arbeit macht frei.”

Cameron has tried to justify tax cuts to millionaires by saying that "we shouldn’t penalise success”. But is that the main reason why some people – including him – have loads of money? No, the biggest stores of wealth are those that have been inherited, not earned by their owners. And why should large stocks of wealth be able to buy political influence?

In an article entitled ‘Does inequality matter in rich societies?’, Colin Crouch has said:-

“The very wealthy, whether individually or as corporations, are able to buy political influence – whether through lobbying or bribing political decision-makers, funding campaigns, or controlling mass media organs. Large corporations and wealthy individuals are geographically mobile across the globe, can choose in which jurisdictions they live, bring wealth to those jurisdictions, and can therefore exercise pressure on governments to provide policy environments congenial to them. These environments may then enable them to increase their economic wealth even more, offering further possibilities of political influence, and so on in a great spiral. Unless acquired in very obviously criminal ways, wealth also conveys social respect, even awe. This is useful, not just as something pleasant to enjoy in itself, but because it brings further political power: the very wealthy are asked for advice by governments and other public authorities; they acquire positions on governing bodies; if they decide to take up philanthropic activities, they can decide which causes to bless and which to ignore.”

http://www.social-europe.eu/2011/04/does-inequality-matter-in-rich-societies/

The less privileged may ultimately benefit from this Government's hostility.

Numerically the lower orders will always represent more votes than the toffs. Just needs a bit of organising.

Well, that's clinched it . Tomorrow I am going to instruct Mrs Hornby to keep the bedroom curtains drawn while I sit by the front door letterbox , waiting for the benefit cheque to drop through.

Although 'instructing' Mrs H to do anything will probably mean 'curtains' for me...

Drawn curtains may also indicate a Night Worker. Sorry, Nurse!

Ted Heath's London had Soup Kitchens and up to three million people in Britain urgently needed re-housing because they were living in damp, overcrowded slum conditions, according to housing charity Shelter. Thatcher's Britain produced beggars living in cardboard cities and the Cameron government has ushered in Food Banks.

Inequality matters to the Tories. See how hard they work to sustain it.

Inequality is not just a problem for the poor. In rich countries, a smaller gap between rich and poor means a happier and more successful population. The most unequal countries - the USA, the UK, Portugal and Singapore - have much worse social problems than the most equal countries of Japan, Sweden and Norway.

According to Richard Wilkinson, co-author of ‘The Spirit Level’, homicide rates are lower and children experience less violence in more equal societies. Crime rates are usually higher in less equal countries, so there is more chance of being robbed, trust is lower, and it is harder to mix with poorer people because their lives are so different. A rich person is much more likely to be the victim of crime in the USA than a rich person in Denmark.

The UK is much more unequal than it was in the 1970s, but appears to have bucked the trend. Although reported crime doubled under the Tories between 1979 and 1997, it fell by 43% under the Labour government from 1997 to 2010. However, in the UK, despite fewer crimes, imprisonment rates have been climbing steadily for decades due to longer sentences.

The USA imprisons people at 14 times the rate of Japan, yet only about 12% of the growth in prison population is due to an increase in crime. Most of the rise is due to more severe sentencing, which is more likely where social distances are wider and there is a greater sense of ‘them and us’ – where people are more afraid and social attitudes are harsher. There are lower imprisonment rates in more equal societies, including more equal states in the USA, and more emphasis on training and rehabilitation, resulting in lower re-offending rates.

Source:-
http://classonline.org.uk/docs/Why_Inequality_Matters.pdf

Ivan wrote:Inequality is not just a problem for the poor. In rich countries, a smaller gap between rich and poor means a happier and more successful population.....

The USA imprisons people at 14 times the rate of Japan, yet only about 12% of the growth in prison population is due to an increase in crime. Most of the rise is due to more severe sentencing, which is more likely where social distances are wider and there is a greater sense of ‘them and us’ – where people are more afraid and social attitudes are harsher. There are lower imprisonment rates in more equal societies, including more equal states in the USA, and more emphasis on training and rehabilitation, resulting in lower re-offending rates.

Source:-
http://classonline.org.uk/docs/Why_Inequality_Matters.pdf

"Where people are more afraid" That indeed seems to be the problem in contemporary Britain. The people in Government are genuinely frightened of the people they "represent". Take a step backwards and analyse dispassionately the actions taken by the Tory-led Coalition and it must be perfectly obvious what the underlying motivation has been.

Cameron/Clegg/Osborne are right to feel that fear though, aren't they? The fear that grips the bully unsure of how long he can keep the upper hand.

Did Labour oversee the biggest gap between rich and poor "in modern times"?
Answer: Yes.
If we look at data made available by the Institute for Fiscal Studies (dating from 1961 - when their records began), we can see that New Labour's third term saw a sharp rise in income inequality - in 2009 it was at the highest level since record began - as well as a fall in the income of the poorest fifth of the population.

"....New Labour's third term saw a sharp rise in income inequality...."

However did a Bloomsbury "think tank" like the Institute of Fiscal Studies ever come to such a conclusion?

http://en.wikipedia.org/wiki/Institute_for_Fiscal_Studies

tlttf wrote:-
Did Labour oversee the biggest gap between rich and poor "in modern times"?
Answer: Yes.

Until now that is – but of course you don’t mention that. However, it is refreshing to see a right-wing Tory at least feigning concern about inequality, which is not something that bothers the party for which you vote.

If we look at data made available by the Institute for Fiscal Studies we can see that New Labour's third term saw a sharp rise in income inequality.

It’s a pity you didn’t focus on the content of the opening post, instead of trying to derail this thread with a smartass comment. You might have noted how just before he became Deputy Prime Minister, Nick Clegg lamented that by 2007 the best-off fifth had seen their post-tax incomes rise so much that they were receiving 7.2 times the incomes of the poorest fifth, as opposed to 6.9 times as much in 1997. That is a slight increase, but it’s hardly “a sharp rise” as you claim; I suppose we have to accept that Tories are prone to exaggeration when they’re not telling downright lies. By the way, that fact was provided by Danny Dorling, a professor at Sheffield University, but because you’re probably too ignorant to have heard of him, you’ll no doubt describe him as “an invisible man”.

Now Clegg is doing his bit to increase inequality as a member of a government which is giving millionaires a tax rebate of £107,000, while freezing wages and reducing benefits. Meanwhile, the 1,000 richest people in Britain have seen their average personal wealth rise from £336 million each in 2010 to £369 million by 2011, and then to £414 million by 2012. And in 2010/11, the incomes of the chief executives of the largest 100 companies in the UK increased by nearly 50%, while the average pay rise in the private sector was just 2.7%. Because prices increased by 5.2%, most private sector workers actually became poorer, and pay freezes meant that many public sector workers did even worse.

I can’t think why you didn’t quote this when mentioning “data from the IFS”:-

On 12 September 2011, the Institute of Fiscal Studies released statistics showing that the least well off 20% of British households will lose 6% of their income per year between 2011 and 2014 due to government cuts. Those statistics show that inequalities are increasing substantially again and in a far shorter period of time, not least because incomes at the bottom are now falling in real terms.

And that was before Osborne announced his real-terms reductions in benefits earlier this month.

In 2009 inequality was at the highest level since record began – as well as a fall in the income of the poorest fifth of the population.

How strange! On 7 April 2010, your preferred source, the IFS, released a document which said:-

The tax and benefit measures implemented by Labour since 1997 have increased the incomes of poorer households and reduced those of richer ones, largely halting the rapid rise in income inequality we saw under the Conservatives. Despite this, inequality was still slightly higher in 2007–08 than when Labour came to office.

Richard Wilkinson and Kate Pickett, co-authors of ‘The Spirit Level’ wrote this for ‘The Guardian’ in 2010:-

We are suffering the impact of the massive increases in income inequality under Thatcher, which Blair and Brown have since failed to reverse. In the 1980s the gulf between the top and bottom 20% widened by a full 60% – much the most dramatic widening of income differences on record.

Almost all of Gordon Brown's budgets did at least something to redistribute from rich to poor. But because the benefit was entirely offset by the unconstrained rise in top earnings, he can claim no more than having prevented a greater rise in inequality.

What happened in the later 1980s may now seem merely water under the bridge. But broken Britain is Thatcher's bitter legacy. Rather than having instantaneous effects, inequality gradually corrodes the social fabric.

In October 2009, Cameron rounded on Labour, saying: "Who made inequality greater? No, not the wicked Tories. You, Labour. You're the ones that did this to our society. So don't you dare lecture us about poverty. You have failed and it falls to us, the modern Conservative Party, to fight for the poorest who you have let down."

Please spare us the hypocrisy. Free market capitalism creates vast inequality, which is why we need governments that are prepared to try and redress the balance. Cameron's one certainly isn’t. As John Locke wrote: "I have always thought the actions of men the best interpreters of their thoughts."

Sources used:-

http://classonline.org.uk/docs/Why_Inequality_Matters.pdf

http://www.newleftproject.org/index.php/site/article_comments/rack_of_inequality

http://www.ifs.org.uk/pr/ebn123_2010.pdf

http://www.guardian.co.uk/commentisfree/2010/jan/29/social-mobility-inequality-conservative-thatcher

Inequality is falling, and for once, Cameron would be right to blame Brown

From an article by Alex Hern:-

"Nothing this government has done will help equality. That's why they're keeping quiet about it.

Between 1997 and 2010, Labour supported the bottom part of the income distribution with significant increases in the amount of redistribution.

The government would be silly to stake its reputation on a chance fall in inequality due mostly to the actions of its predecessor – because what it has got planned will make the situation much, much worse."

For the full article:-
http://www.newstatesman.com/politics/2012/12/inequality-falling-and-once-cameron-would-be-right-blame-brown

Maybe equality isn't so much about income as it is about equality of opportunity - access to quality education, health care and public services.
Not everyone wants lots of money, but everyone, in my view, should have enough, and the opportunity to aim for more if they want it.
The current government's policies, in dismantling the NHS, dividing and ruling in education, and decimating public services are ensuring that those in lower socio/economic groups don't get the opportunity to aim for better.
Under a Labour government, it's my impression that there is always investment in those areas that will give young people a chance to achieve more than their parents, if they want, and the chance to have a decent life even if they choose to spend their working life in a fairly humble job.
That was the welfare state vision as I understand it, and a jolly good vision too - we'd be in more trouble without bin men and domestics than we would without bankers and politicians.

Greed always seems to trump fair-practice.

Probably something to do with being a human. Nice Guys come last.

Inequality – some solutions

Introducing low pay ratios – the government, local authorities and other public bodies can make sure their pay structure keeps to a low pay ratio and can also encourage employers in both the public and private sectors to adopt low pay ratios, transparency, and other codes of best practice. Government and local authorities can contractually oblige firms paid by them to keep to a low pay ratio – in some firms with public funding the chief executive gets 300 times the pay of the lowest paid worker.

Paying a living wage – in-work poverty is rising. Introducing a living wage would counteract this growing injustice.

Restricting top pay rates – moves to enable shareholders to prevent exorbitant top pay rates should be supported.

Promoting trade union and employment rights – extending industrial democracy, worker representation, co-ownership, and other measures will reduce workplace inequality. Trade unions have an important role in improving wage levels for union and non-union members alike. Higher wages mean more spending power. Over the last thirty years, a lower and lower proportion of national income has gone to the majority of workers. Effective unions can raise this proportion, reducing the share going to those already extremely well off. Their work can benefit the entire society, not just union members.

Reforming the tax system can produce greater equality through:-
• Increasing inheritance and property tax.
• Introducing more progressive taxation policies.
• Reducing tax relief on pensions contributions for the highest earners.
• Cracking down on those operating through tax havens to eliminate tax evasion and reduce tax avoidance.

http://classonline.org.uk/docs/Why_Inequality_Matters.pdf

Ivan quoted:-
Inequality – some solutions
http://classonline.org.uk/docs/Why_Inequality_Matters.pdf

Introducing low pay ratios – in some firms with public funding the chief executive gets 300 times the pay of the lowest paid worker.
In SOME firms, the CEO may actually be worth it. Bill Gates is a multi-billionaire, but his operation provided and continues to provide, a rather comfortable living for thousands of others. Not to mention ongoing Charitable activities.

Paying a living wage – in-work poverty is rising. Introducing a living wage would counteract this growing injustice.
The "living wage" is a moveable feast, depending on where you are and in what timeframe. China sold its Goods to the rest of the world because wages were pitiful, but now the population have successfully demanded comparison with The West, China is losing its competitive edge. The same obviously happens everywhere else, including the UK. I left school and started work for £7 a week. Today, some people wouldn't bother to bend down to pick up a pound coin lying on the pavement.

Restricting top pay rates – moves to enable shareholders to prevent exorbitant top pay rates should be supported.
The Politics of Envy. Next!

Promoting trade union and employment rights – Their work can benefit the entire society, not just union members.
Having myself been Branch Secretary of a Trade Union in the 1980s years, I hope I will be granted at least a hearing on the matter. The Trade Union movement, inter alia, brought down Labour governments on occasion, when there was a clash of wills in some power struggle or other. Unions made Docks unprofitable, and shipyards and motor manufacturing, sometimes just to demonstrate their power. No Trade Union has ever been able to do much for the Unemployed. The Trade Union movement is valuable and irreplaceable, but some of its Officers have sometimes become too big for their boots.

Reforming the tax system can produce greater equality through:-

• Increasing inheritance and property tax.
Many homeowners want to have something to leave to their children. It's a fundamental human instinct.

• Introducing more progressive taxation policies.
Simplification could have a priority.

• Reducing tax relief on pensions contributions for the highest earners.
It's been reduced.

• Cracking down on those operating through tax havens to eliminate tax evasion and reduce tax avoidance.
What do Apple/Google/Amazon/Boots/Starbucks et al DO with that money they have squirrelled offshore? They can't repatriate it to their Home Country to spend it, without paying tax on it first.

oftenwrong wrote:

Ivan quoted:-
Inequality – some solutions
http://classonline.org.uk/docs/Why_Inequality_Matters.pdf

Introducing low pay ratios – in some firms with public funding the chief executive gets 300 times the pay of the lowest paid worker.
In SOME firms, the CEO may actually be worth it. Bill Gates is a multi-billionaire, but his operation provided and continues to provide, a rather comfortable living for thousands of others. Not to mention ongoing Charitable activities.

If you restrict the top/bottom earnings ratio of a company via a sliding tax scale based on the top-bottom differential, you wouldn't prevent an outstanding individual who's making that kind of contribution from earning a fortune. The company would pay a higher tax rate, but the profits and innovation would be worth it, so investors would live with the tax rate.

A right-wing economist lamented the fact that most top executives receive 'entrepreneurial rewards for managerial performance'. He was right. My differential-based solution would limit such idiocies, because investors would quickly see that 'managerial performance' isn't worth an extra percentage point (or whatever) in tax.

Paying a living wage – in-work poverty is rising. Introducing a living wage would counteract this growing injustice.
The "living wage" is a moveable feast, depending on where you are and in what timeframe. China sold its Goods to the rest of the world because wages were pitiful, but now the population have successfully demanded comparison with The West, China is losing its competitive edge. The same obviously happens everywhere else, including the UK. I left school and started work for £7 a week. Today, some people wouldn't bother to bend down to pick up a pound coin lying on the pavement.

Again, this would be achieved via the differential-based sliding tax scale. If a top exec is worth a higher salary and investors don't want the pain of a higher tax rate, they could avoid it by paying their lowest earners more. This would largely offset - perhaps more than offset - the loss of revenue caused by the lower tax rate, as the Treasury would need to pay less to those workers in income-support benefits/tax credits.

Restricting top pay rates – moves to enable shareholders to prevent exorbitant top pay rates should be supported.
The Politics of Envy. Next!

Not envy. Common sense. See above.

• Cracking down on those operating through tax havens to eliminate tax evasion and reduce tax avoidance.
What do Apple/Google/Amazon/Boots/Starbucks et al DO with that money they have squirrelled offshore? They can't repatriate it to their Home Country to spend it, without paying tax on it first.

There's a simple solution to this. Make a law that every company that operates in the UK pays UK tax the same proportion of its global profits that its UK turnover represents of its global turnover. It's definitely a simplification - just one that would take some political will and guts.

I think fairness matters. People with low incomes should get a fairer wage, maybe not equal to someone on top, but closer.

Yes, it's true that there will always be those whose contribution, for whatever reason, is more valuable in terms perhaps of keeping the organisation afloat, but that should never mean that those making a smaller contruibution should be in want due to being unable to draw a living wage from that sme organisation.
How many dinners can one person eat, how many houses can one person live in, how many cars can one person drive?
Everyone needs to live somewhere, to heat their homes, to dress themselves, eat, and travel, and just because some people may deserve to have those things in better style than some others shouldn't mean that the rest of the world should do without essentials

[quote="skwalker1964"]

oftenwrong wrote:

Ivan quoted:-
Inequality – some solutions
http://classonline.org.uk/docs/Why_Inequality_Matters.pdf

Restricting top pay rates – moves to enable shareholders to prevent exorbitant top pay rates should be supported.
OW: The Politics of Envy. Next!

SKW: Not envy. Common sense. See above.

I have a suspicion that conviction Socialists might be surprised to learn about proposals for a Labour Government to legislate in favour of empowering Shareholders - not a Group usually thought of as natural Labour Voters.

There are often times when the interests of disparate groups converge. I'd think of it more as harnessing the power of shareholders to achieve an agreed good.

Sure. There will often be occasions when "my enemy's enemy is my friend", but human nature being as it is, an un-natural alliance will rapidly crumble when circumstances change.

Shareholders make constant calculations to divine the precise number of golden eggs which can be extracted without killing the golden goose, and not everyone will always agree on the arithmetic. For example some investors might be content with a modest dividend because any more would take them into a higher tax bracket, so the Chairman's pension is irrelevant to them for so long as the original investment appears to be in safe hands.

Serious Objectors are often just expressing raw dissatisfaction with the Capitalist system, and should be ready with an answer to the question, "So what else have you got?"

Here are extracts from two articles which indicate how inequality is growing rapidly, both in the UK and elsewhere.


"Why do we accept the status quo? Why, frankly, isn’t Parliament Square on fire?"

Extracts from an article by Laurie Penny:-

Most of us know far too well that we’re living in a staggeringly unequal society, one where the gulf between rich and poor is growing wider year on year. Parents have begun to resign themselves to the idea that their children will grow up to be poorer than them; young people leaving school are gently abandoning the idea of a stable home, a secure job and a decent wage.

We put up with it in part for the same reason that our politicians feel it entirely appropriate to request a 32% pay rise in the middle of a double-dip recession: because of a new morality of money and power that justifies inequality. Since this government was elected in 2010, the right-wing press has pumped out a torrent of propaganda declaring that those on benefits are “shirkers”, whereas those who are rich and powerful deserve their wealth because of their “hard work”.

Right now, when politicians speak of “workers” and “shirkers”, they mean “rich” and “poor” – and they know which side they’re on. The logic of work and power is turned on its head. Our leaders and the super rich are praised as “hard workers” but if someone else is poor and powerless, they are told it’s their fault because they didn’t work hard enough, even if they are manifestly pulling double shifts and raising a family alone.

As social security is cut to starvation levels, the very rich will be enjoying a 5% tax cut from April. How long can the logic of inequality, the logic of “workers” and “shirkers”, withstand public rage?

For the whole article:-
http://www.newstatesman.com/uk-politics/2013/01/why-do-we-accept-status-quo-why-frankly-isnt-parliament-square-fire


"Billionaires' fortunes hinder fight against poverty, says Oxfam"

Oxfam said the world's poorest could be lifted out of poverty several times over should the richest 100 billionaires give away the money they made last year. Without pointing a finger at individuals, the charity argued that the $240bn (£150bn) net income amassed in 2012 by the richest 100 billionaires would be enough to make extreme poverty history four times over. In the report ‘The Cost of Inequality: How Wealth and Income Extremes Hurt Us All’, Oxfam found that the richest 1% had increased their incomes by 60% in the past 20 years, with the financial crisis accelerating rather than slowing the process.

Barbara Stocking, Oxfam's chief executive, said extreme wealth was "economically inefficient, politically corrosive, socially divisive and environmentally destructive". She said: "We can no longer pretend that the creation of wealth for a few will inevitably benefit the many – too often the reverse is true. In the UK inequality is rapidly returning to levels not seen since the time of Charles Dickens.” The report says that in the USA, the share of national income going to the richest 1% has doubled since 1980 from 10 to 20%.

For the whole article:-
http://www.guardian.co.uk/society/2013/jan/19/super-rich-fight-poverty-oxfam

Ivan wrote:Here are extracts from two articles which indicate how inequality is growing rapidly, both in the UK and elsewhere....


"Why do we accept the status quo? Why, frankly, isn’t Parliament Square on fire?"

I suspect that a lot of people actually find themselves better-off than the newspaper headlines (and Gideon) would appear to suggest.

In short, the "crisis" is not affecting the majority all that badly, if they were to admit it.

It's the people at the very bottom of the heap who feel the pinch - and they're mostly indoctrinated by the Red Tops into thinking of themselves as the scum of the earth for being in that position - and their neighbours are just busy reviling them.and praying it soesn't come to that for them.
The topping up income benefits still seem to be working OK for most, so if you fall off the edge of the world by losing employment, it's easy to feel that you should have somehow planned better.
What worries me, is the number of employed people who don't have job security - who maybe have a contract for a few hours a week but are expected to be available 'on the bank' at a moment's notice for the rest of the time - or who have a temporary contract, which will only be renewed if they are slavishly subservient in the workplace, or, who are employed by one particular LARGE local employer via an agency, which gives them no security at all.
I regularly see young chaps with severe repetitive strain injuries due to their work, who are laid off at a day's notice and with no recourse because they have had to take time off work on doctor's orders.
That's where the inequality comes in, in real terms - it would be great to sort out the billionaires, but, day to day the inequality is between people in secure employment and the vast majority who are frankly as disposable as condoms

Man's inhumanity to Man has a long and well-recorded History.