The Inequality of Wealth
Ben Shelley | 27 March 2017

The gap between the rich and the poor in Britain is growing at an alarming rate. Britain has had the fastest growing inequality of any developed economy since 1975 and the income gap between the top 10% and the bottom 10% of the population has only been getting bigger and bigger, especially over the last decade. If you reside in the top tenth of the population, you will be earning twelve times as much as someone in the bottom tenth. This exponential growth in the gap between these two peoples is what I believe to be the biggest ethical-economic issue facing today’s government.

 

 

Unfortunately, the UK government currently shows little sign of changing anything. In fact, as pay soars for the top 1% of the population, the top tax rate has been slashed, meanwhile, the benefits for the disadvantaged have been cut. The Conservative party seem to be pursuing economic policies, which result in good amounts of growth, but the harsh reality is that any newly created wealth never trickles to down to those at the bottom of society (who could do with a pay rise more than anyone). It is bad luck for the government that this ever-growing structural problem cannot be fixed with a short-term populist policy drawn up by a thirty-one year old career politician. The problem is long-term and thus the solution is most certainly long-term as well. What can be said for today’s government is that unemployment is falling and more jobs are available, particularly for unskilled workers who make up the bottom 10% of earners.

 

 

The current education system is, in my opinion, the prime culprit for creating this inequality. Just about every sphere of influence is run by a privately educated individual and this simply should not be the case. The country has seen a huge success deficit between state and privately educated individuals since the 1960s. Many think tanks and individuals point to the scrapping of the grammar school system as the reason for this disparity. Although one could argue that the system wrote off youngsters who were not considered to be intelligent enough and that the categorical approach to education was a little unethical; it was the best solution anyone has come up with in reducing wealth inequality. It created a system that favoured the talented and hardworking; not the rich. It meant that the wealth of the family you were born into had little effect on your career and earning prospects. Social mobility was at an all-time high, but unfortunately the UK governments (both Tory and Labour) had other ideas- ideas which reduced this social mobility and contributed to the huge gap between rich and poor that we have today. I would argue for us to revert to the system of grammar schools. Although it is not a perfect figment of social engineering, it’s a damn sight better than the current state of affairs.

 

 

Immigration, despite Nick Clegg’s most ‘honest’ beliefs, is undoubtedly damaging for working class people and most certainly widens the gap between rich and poor. The job market has become far too competitive and has driven down wages for unskilled workers. This not only makes the poor poorer but also the rich richer as their workers are now working for less- pushing up profits for the top earners. Make no mistake, immigration is good for the country but the mass and uncontrollable influx is becoming very damaging to our society. If we enforced stricter controls on our borders we could control our immigration by keeping the skilled and entrepreneurial immigrants who create jobs for Britons, but avoiding the mass influx of unskilled immigrants who only undercut wages for the working classes (obviously this is not as easy as it sounds due to Clegg’s undying love for the EU and its ‘democracy’).

 

Beyond immigration and the education system, the solution to inequality becomes a lot harder. Do we raise minimum wage? Or would this just push prices up and simply lower the real purchasing power of incomes? Do we raise taxes and benefits? Or would this de-incentivise workers, both rich and poor?

 

 

One cannot forget inequality is essential to any successful economy- it provides an incentive for people to work and to strive for a better standard of living- but what I believe to be the problem is the vastness of the thing and how difficult it is for a youngster to earn one’s way in this world without a wealthy background.

 

Social mobility and inequality are deeply rooted structural problems and they will most certainly be difficult to fix. People will always measure their incomes in relevance to others and social discontent is currently rising and will continue to do so until the government puts an end to this huge imbalance of wealth and assets, or quite frankly, the people will.

James Routledge 2016