The UK could be following the US into extreme, devastating inequality, a new report finds — and the problem goes far beyond income. Nobel prize-winning economist, Sir Angus Deaton, is leading a review of inequality in the UK, alongside the Institute for Fiscal Studies thinktank. Their ground-breaking report synthesizes something that many of us have already noticed — inequality is rampant and it’s affecting so many different areas that it’s hard to know where to begin. While many reports on inequality superficially look at income disparity between different groups, that obscures much larger issues. The IFS looks at a myriad of different factors to show how inequality has been left to run rampant, leading to increased “deaths of despair”.
“Income is important for well-being, but it is far from being the only thing that matters,” the report explains. “Other things matter to people’s lives: mental and physical health, families and social networks, quality of work, civic engagement and political participation to name a few.” Even though some higher incomes have fallen during recent years, that simply doesn’t tell the whole story. There is increasing in-work poverty — people who work part-time and even full-time jobs who still cannot make ends meet — alongside rising rents, more divergent wealth distribution, a struggling NHS, increased isolation, fewer resources for the mental health issues and far, far more. At the same time, the tiniest sliver of high earners just keeps seeing its wealth skyrocketing.
Excited to be launching review of inequalities, chaired by Sir Angus Deaton https://t.co/3aIwNSw04h
Most shocking initial finding: mortality rates of middle aged Britons rising as more "deaths of despair" from suicide, drugs and alcohol start to outweigh improvements elsewhere pic.twitter.com/ljpEsVps4T
— Paul Johnson (@PJTheEconomist) May 14, 2019
“According to the IFS paper, the richest 1% in Britain have seen the share of household income they receive almost triple in the last four decades, rising from 3% in the 1970s to about 8%,” the Guardian reports. “Average chief executive pay at FTSE 100 firms has risen to 145 times that of the average worker, from 47 times as recently as 1998. Earnings in the lowest-earning working households have barely risen since the mid-1990s, compared with greater increases for higher-income groups.”
That’s why employment statistics can be so misleading. You can point to the current job market in the US and show low rates of unemployment — the same is true in the UK. In fact, politicians do, over and over, point to these figures while ignoring rising food banks, increased zero-hours contracts, decreasing health, increasing debt, and all of the other facts and figures that we need to find the full picture. There is more to equality than income. There is more to equality than money. While economic disparities are a huge, crucial chunk of the inequality problem, they are not the whole problem.
Seeing how democratic capitalism is failing huge sections of the population is only the first step toward much larger changes — but at least we’re starting to look past income and employment headlines and see the larger picture.