Results may not have been as bad as expected but still made for dismal reading in last week’s OECD report on inequality. At a time when the rewards of the rich are being called sharply into question, the UK still has one of the highest levels of income inequality in the developed world and social mobility is static. The rate at which inequality has widened is slowing, which is not the same as the gap narrowing. What we already knew has been confirmed: the proceeds of the global economic boom that is now unravelling have gone disproportionately to the already wealthy.
Any equalisation of incomes, however small, is to be welcomed but the media coverage of this missed the most salient point of the report: the gap between rich and poor has grown in more than three-quarters of all OECD countries over the past two decades. Have we and our media become so complacent with wealth accumulation in the hands of the few that this is considered positive, or are we just desperate for some good news?
The gap has narrowed as a result of incomes of the poor being raised through employment, yet each month the number of claimants rises as recession starts to bite. Those with the most precarious relationship to the labour market will be worst effected, the paltry gains made during the boom could be reversed as quickly.
Subservience to the rich because of their role as ‘wealth creators’ has meant that the UK has had a tax system that is not fit for purpose. On the contrary, we have rewarded the kind of credit-fuelled wealth ‘creation’ that has proven to be so damaging. The spatial dimension to this is also vitally important: forthcoming research from nef on the geography of inequality provides further evidence that poverty is becoming increasingly concentrated in England. As it becomes clear quite how disconnected the economic bubble was from the real world, perhaps we can begin to think beyond redistribution, to a more stable system that rewards other kinds of value creation and stops the disparities emerging in the first place.