Analysis of UK incomes outlines the concentration of wealth across a tiny proportion of the population, and outlines pathways to fairer earnings
New research published by the High Pay Centre reveals that even a modest level of wealth redistribution could make a substantial difference to the standard of living for low-earners, and would not be greatly missed by those at the top.
For example, 10% redistributed from those earning £150k+ (about 0.9% of the population) to the bottom 25% would equate to an average 55p per hour pay rise.
Other key findings include:
- The share of national income going to the top 1 per cent of the income distribution has more than doubled since 1979 to 14.5 per cent from 6 per cent.
- There are 29,000 people in the UK (the top 0.11 per cent of the income scale) who earn more than £500,000 a year. They already take home £21,500 a month after tax. That is more in a month than someone on an average salary earns in a year (£20,500, after tax). And the government is about to give a tax break worth up to £2.7 billion to the top 1 per cent when the 50p rate is abolished in April, so take home pay for the rich will become even more disproportionate.
- There are 6.75 million people (the bottom 25 per cent of earners) who take home less than £800 a month. Five million of these are full-time employees.
- Wages for most of the population have stagnated, barely keeping up with inflation.
- If those earning more than £150,000 took a 10 per cent pay cut and it went directly to the bottom 25 per cent, they would get a 55 per hour pay rise to £7.35, taking them closer to the national living wage of £7.45.
- If those earning over £300,000 (the top 0.25 per cent) gave up 10 per cent of their pay, the lowest paid 25 per cent would get a rise of £40 a month.
- These changes would not be fiscally neutral, but would inject some spending power into the economy at the bottom, where it is needed.
The report highlights the urgent need for business leaders, bankers and others at the top end of the income scale to engage in the debate about what constitutes a fair reward, and whether existing levels of poverty and inequality are acceptable in an advanced economy such as the UK