INCOME Chante & Jessica

Income Between 1979 and 1997 (unbroken period of Conservative government), there was a widening in income inequality between the rich and poor in Britain. Most unequal since records began in 19 th century. During this time: Average income rose by 36% - top 10% of earners experienced a 62% rise / poorest 10% earners experienced a 17% decline. 2000: Service class earned + average wage. Manual workers earned – national average. 2002/03: richest 10% received 29% of total disposable income (in comparison to 21% in 1979), poorest 10% received 3% of total disposable income (in comparison to 4% in 1979).

Income: after Labour took power in : top 0.1% (47,000 people in all) received 4.3% of all income – 3x greater than their share in In the UK now: top 10% of individuals receive 40% of all personal income (compared to 21% in 1979). Poorest 10% still receive only 3% (compared to 4% in 1979). Institute for Fiscal Studies study of 2007 tax records concluded that income inequality between rich and poor is now at its highest level since the late 1940s (Brewer et. Al 2008)

Income inequality and market forces: Roberts (2001) New egalitarian explanation for income inequality is market forces. Skill requirements rise and the most skilled get paid the best. (Giddens & Diamond: economically successful as it promotes competition, initiative and creativity.) However Roberts argues: facts do not support marker-forces view as the pay rarely corresponds with labour shortages and surpluses. Average graduate pay should have fallen due to the higher produce of graduates today compared to 30 years ago. However pay has actually risen – pay differentials between graduates and non-graduate employees has widened.

Income inequality and market forces: Roberts (2001) Only class theory can explain income inequalities. Upper-middle-class occupations generally fix their own salaries and supplement them with other financial incentives – i.e. stock options, bonuses – as they have overall day-to-day operational control over corporations and in some cases, actually own major shares of the company. Reduction in tax for top earners from 83% to 40% in 1979 benefited this group. Majority of lower-middle-class and working-class occupations either negotiate salaries collectively as part of a trade union or are told how much they’ll earn – unlike many middle-class professionals who negotiate their own salary.

Corporate moral responsibility The financial crisis in 2009 encouraged concern over salaries of executives, especially in banking and it’s been argued that corporations should be more morally responsible because society still has problems with poverty, deprivation and debt. In 2005, Philip Green was labelled greedy for paying himself £1.4 billion in salary. Many in society are increasingly unhappy because top executives are not only rewarded for success, but also for failure in some cases where people get fired but still receive thousands of pounds. Orton and Rowlingson- conducted a survey into public attitudes to wealth and inequality and found people were uncomfortable with the pay of the highest earners and many thought people at the top were paid too much, while people at the bottom are paid too little.

Poverty The Low Pay Unit estimated in 2000 that 45% of British workers (mostly semi-skilled and unskilled) were earning less than 2/3rds of the average wage. Many low-paid workers are caught in a poverty trap; they earn above the minimum level required to claim benefits but tax ect., takes them below it. Also, many on benefits end up worse off it they accept low paid work because they’re no longer allowed to claim state support.

Poverty Absolute poverty levels in Britain since 1997 have fallen but relative poverty has continued to rise steeply. Basically, absolute poverty is the minimum standards below which no one anywhere in the world should ever fall. Relative poverty is that, in a rich country such as the UK, there are higher minimum standards below which no one should fall, and that these standards should rise if and as the country becomes richer. Savage- relative poverty in 1997 was twice the level it reached in the 60s and 3x what it had been in the late 70s. 40% of children are born into families in the bottom 30% of income distribution. Treasury figures in 1999 estimated up to 25% of children will never escape from poverty and deprivation is being passed down the generations by unemployment and underachievement in schools.

Poverty Feinstien et al- a study of children born in 1970 found a child born to a labourer was 6x more likely to suffer extreme poverty by the age of 30 than one born to a lawyer. It also suggested the gap between the richest and poorest children is wider today than 30 years ago, despite government funding to cut child poverty. Feinstien points out the 3 most influential factors in predicting poverty at the age of 30 were; parental occupation, low income and housing which are all symbols of social-class position.