From the TUC

Income inequality very high in the UK

05 Jul 2010, by in International, Society & Welfare

The latest issue of Social Trends shows that the UK is a very unequal country by European standards – we have levels of inequality that are normally found in the EU’s poorer Mediterranean and Balkan members.

Social Trends provides a comparison for Gini coefficients (the Gini coefficient is a commonly used yardstick, and it measures inequality across the income distribution) in 2007, which is the most recent year for which there is comparable data available. Social Trends provides a comparison for Gini coefficients (the Gini coefficient is a commonly used yardstick, and it measures inequality across the income distribution) in 2007, which is the most recent year for which there is comparable data available.

The UK has the 8th worst level of inequality of the EU’s 27 members; of countries that joined the EU in the 20th century, only Greece and Portugal are worse:

Country Gini
Romania 38
Portugal 37
Bulgaria 35
Latvia 35
Greece 34
Lithuania 34
Estonia 33
United Kingdom 33
Italy 32
Poland 32
Ireland 31
Spain 31
Cyprus 30
Germany 30
Netherlands 28
Luxembourg 27
Austria 26
Belgium 26
Finland 26
France 26
Hungary 26
Malta 26
Czech Republic 25
Denmark 25
Slovakia 24
Slovenia 23
Sweden 23

Things don’t have to be this way – thirty years ago, the UK’s Gini coefficient was at the level typical of Europe’s more egalitarian countries. The deterioration took place in the 1980s, when policies were shifting income and power from the poor to the rich – another round of cuts biased against the poor risks taking this country to a new low point.

4 Responses to Income inequality very high in the UK

  1. Tokyo Gaijin
    Jul 5th 2010, 2:37 pm

    Richard
    It’s not clear what point you’re making here.
    From my reading on the Gini index most research shows that the ideal level for a developed economy is between 25 and 40, so 33 doesn’t look like much of a problem.

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  3. Owen Tudor

    Owen Tudor
    Jul 5th 2010, 10:03 pm

    Tokyo, it’s true that on a global scale, most of Europe is what the Chinese call “the harmonious society”, regardless of where on the Gini scale we lie. The whole of Europe is relatively equal compared, say, to sub-Saharan Africa, or South East Asia. But there is nevertheless considerable difference between the level of equality in, say, Denmark and Romania (Denmark has high global levels of productivity, and, to the extent that you can measure these things, happiness. Romania doesn’t.) Richard’s figures show that on a European scale, we’re more like Romania than Denmark. It’s much more realistic to compare ourselves with the rest of Europe than the poverty-afflicted global south, and he is showing that we could be doing so much better than we are.

  4. Tokyo Gaijin
    Jul 9th 2010, 5:03 am

    I still see this as a pointless, meaningless comparison.
    Simply measuring inequality without looking at the absolute values tells us very little. For example if the poor became poorer, but the rich become more poorer the inequality measure would get “better”, but few would consider this a desirable result. On the other hand if everybody gets richer but, within certain limits (which the UK is well within as per my previous comment), the rich get more richer, the inequality measure would get ‘worse” but the reality is the opposite – everybody’s better off.
    There is little evidence to show the level of inequality itself has any tangible, measurable, results. So it might be useful fodder for the “it’s unfair” brigade but it reality it matters little.