From the TUC

Britain now most unequal EU country, says official report

18 May 2015, by in Labour market

The UK is now the most unequal country in Europe, in terms of wages and income distribution, according to a new report by the Dublin Foundation for the Improvement of Living and Working Conditions, which is the EU’s official think tank on life at work. Not only that, but the rise in inequality is so big that it is partly driving the general rise in inequality in Europe. This is what the report says (with my emphasis):

“…the level of wage inequality in the EU as a whole is below that of the US. However, wage inequality in the UK, the EU’s most unequal country, is now above that of the US average. The UK, Latvia and Portugal are the three most unequal countries in Europe

“The Great Recession changed the trend of overall EU wage inequality. Between 2004 and 2008, EU wage inequality decreased; after 2008, it increased. The decrease before the crisis was entirely due to a significant reduction in between-country wage differentials (in other words, a process of convergence in pay levels), which came to a halt in 2008 and even started to reverse at the end of the period of this analysis (2011). The main driver behind the increase in wage inequality after 2008, nevertheless, was within-country inequality, which until that point had remained more or less stable. But such increase was to a large extent driven by developments in the UK, without which the overall EU within-country component of inequality remained more or less stable as a result of rather diverse developments at the country level.”

The UK now also has the worst Gini coefficient of any EU country. Gini is the generally accepted measure of statistical dispersion that represents the income distribution of a nation’s residents. It is the most commonly used measure of inequality.

It is an absolute scandal that the UK has got into this situation. Despite its wide ranging problems, this is still a relatively rich country that can afford to treat all its citizens fairly.

The new government needs to address the challenge of putting this right. Their agenda must include raising the minimum wage and promoting the living wage, putting an end to the unfair public sector pay squeeze, creating more good jobs, leading industry towards higher productivity and curbing the excesses of top pay, with workers on remuneration committees.

Furthermore, rather than attacking unions, the government should recognise and welcome their power to deliver greater equality. 

The UK is shamed today and our international reputation for “fair play” is seriously damaged. We must demand fair wages and incomes and accept nothing less.

14 Responses to Britain now most unequal EU country, says official report

  1. Garry Anderson
    May 18th 2015, 11:46 pm

    I have been communicating with the Office for National Statistics about the Gini coefficient and it is much worse than people think. Most believe the Gini coefficient to be an accurate measure of inequality – we are told that.

    What people may not realise is that the Gini coefficient is ‘unfit for purpose’ and actually dumbs down inequality. Actually, it is worse than useless – this is demonstrable fact and not mere opinion.

    I came across the Gini as David Cameron had been saying that his government has improved inequality (with backing of the ONS). Somewhat unbelievably he says his government reversed nearly three decades of inequality. However, the rich had been increasing their incomes by compound rises up to 30% year on year and the poor now use food banks in record numbers – how can it be true?

    I did not believe them, so conducted analysis and testing of the Gini coefficient and sent my findings on to the ONS in the form of a video. The ONS were unable to address my points, indeed they were most evasive. Nobody thus far can say these findings are wrong – I have also contacted several professors.

    I also made this chart for those bad at maths. Please look at this income distribution chart (made as part of the video). How can (an ideal?) country with only a 6:1 ratio of income distribution (6 x richest income to poorest) – with a much more even spread – be the same inequality as the UK? Even those of low IQ can see the Gini is rubbish for comparing inequality within a country and useless for comparing one country to another. Just how is the UK the same inequality?

    Like other measures e.g. S80/S20, the Gini uses frequency distribution to hide the widening inequality between the privileged wealthy families and the millions of poor families to fool people. I use the analogy of measuring inequality with a rubber band, the inequality in a country always gets ever wider – but the measure still reads the same.

    What do you think – are they afraid to admit their logical fallacy – or do they know it is a con job to stop the plebs revolting. BTW: IDS admits he knows his government are driving people to violent revolution if they do not tackle inequality – which seems the reason they lie to us.

  2. John
    May 19th 2015, 3:24 am

    Thankyou for your full & concerning comment Gerry Anderson. However, there is one comment that red flagged me straight away and that is in one of your paragraphs you mention those of ‘low IQ’. I personally take offence at thís; being a quite late developer (according to my old secondary modern school reports), I would have been ‘classified’ as having low IQ (c/o the early 1960’s meaning of IQ). I would have much preferred the words of lower value of education as opposed to lower IQ.

  3. John
    May 19th 2015, 3:26 am

    & PS – thanks for this article Paul Sellers.

  4. Garry Anderson
    May 19th 2015, 8:51 am

    Dear John – I meant no offence – but I was talking about “those bad at maths”. Within this group there are a subset of people of low IQ who generally have trouble understanding difficult subjects.

    The Gini coefficient is thought by most as a difficult subject. I did my best to make it clear.

    In no way was it meant to insult those bad at maths – though I am sure we all know that a low IQ is in itself not an insult.

  5. Rob Foord
    May 19th 2015, 8:56 am

    Not exactly breaking news – period of analysis ends in 2011 which includes only the first year of the coalition. Question is what’s happened since then?

    Further, it is all relative. Comparing ourselves with other developed Western nations is hardly that enlightening. So we’re as bad as Portugal and Latvia – does that make us really so bad?

  6. Paul Sellers

    Paul Sellers
    May 19th 2015, 9:47 am

    The UK being the most unequal country in Europe should undoubtedly concern us deeply. I’m particularly worried about those stuck in poverty, including the 1 in 5 employees who earn less than the living wage. I’m also worried that things are going to get worse. For example, the well-respected Institute of Fiscal Studies is predicting that 900,000 more UK children will be in poverty by 2020/21. This is morally wrong, bad for the fabric of society and hardly likely to be conducive to the development of a high-productivity economy. The issue is far too important for petty political point scoring and finger pointing. However, government must begin to address this as a high priority, otherwise it will be failing in its duty to its citizens.

  7. Garry Anderson
    May 19th 2015, 1:16 pm

    Paul – there are many factors that contribute to poverty e.g. the holding down of wages as a major part of capitalism.

    Surely there has to be a re-balancing the country – making it fairer (more equal).

    Should we not be looking at fair wage legislation (with living wage and maximum wage) – instead of starvation wages and bosses who bypassed greed and went straight to avarice – insatiable greed?

    Also have a minimum guaranteed hours contract – so that those currently on zero hours contract can count on a certain amount of money coming in each week?

  8. Roger Sealey
    May 19th 2015, 4:48 pm

    If Garry Anderson has concerns about the methodology being used by the ONS then he should contact the UK Statistical Authority. They can look and see if the methodology is correct, if they decide it is not they can take away the ‘Official Statistics’ designation.

  9. Garry Anderson
    May 19th 2015, 5:35 pm

    Thank you Roger.

    Unfortunately Mr Pullinger was CEO of the ONS – he would not answer these points then.

    I contacted him and Mr Watson (DG). They have contempt for the public willing to lie to them about inequality getting better and are clearly without honour.

    This is not libelous – as I have sent them the evidence of why the measure is useless. The fact that the rich got much richer by up to 30% a year since 1986 was a sort of giveaway – don’t you think?

    Nevertheless I will contact Mr Pullinger with my usual nice first email to explain again. We will see if he does the usual evasion.

  10. Garry Anderson
    May 19th 2015, 9:09 pm

    Just realised I had not made it clear that Pullinger has gone from ONS and is now in charge of the UK Statistical Authority.

  11. John
    May 20th 2015, 3:41 am

    Thankyou for your reply to my comment (& indeed others as well) Garry Anderson. This article attracted more than the usual number of comments from readers.

  12. Garry Anderson
    May 20th 2015, 11:51 am

    I just sent the following email to Mr Pullinger and ONS complaints. Thanks to Roger for the suggestion and John for red flag :)

    I tried to be polite as possible considering the disrespect shown – it was best I could do. At least it was somewhat civil.

    Subject: Assessment and Designation as National Statistics of Gini coefficient

    Dear Mr Pullinger

    I had occasion to contact yourself and Mr Watson when you worked for the Office for National Statistics. Unfortunately, it seems you do not engage with the public of matters that they believe most important. Indeed, would be of worldwide importance if found to be correct. Specifically, I was very concerned you (as the CEO of the ONS) seemed to be providing false information about income inequality.

    I politely asked you *personally* about my serious concerns about the Gini coefficient and was dismissed with evasion and propaganda by your staff. I thought this was most rude – do the ONS consider the public to be uneducated plebs? I may not be a professor of mathematics, but I explained I understood how frequency distribution can hide inequality. This behaviour of your staff continued after I went to a lot of trouble making a video for Mr Watson (DG) and yourself explaining in detail why it was unfit for purpose. Indeed, why it was also misleading and deception. Did managers act under your instruction?

    This video took me months with poor health:

    You enabled the Conservative party to go into an election claiming inequality had improved under their management. Indeed, you informed everybody that inequality had improved so much that it had fallen to “the lowest level since 1986”. The fact that the rich got much richer by compound rises of up to 30% year on year since 1986 was a sort of giveaway that inequality had not improved – do you not think? Unless you also believe the poor got rises of up to 30% year on year with their income too.

    How and when was the Assessment and Designation as National Statistics of Gini coefficient made? I am guessing that there was none.

    I am asking you to revaluate the Gini coefficient for Designation as National Statistics in light of the *facts* you have already received. Facts being different from mere opinion.

    I am sure you must understand the logical fallacy – the flaw in your reasoning that the Gini is a valid method to measure inequality. That grouping people into deciles or quintiles hides widening inequality for the population. I use the analogy that it is like measuring with a rubber band – inequality widens getting worse – yet the measure reads the same. I feel like I am having to explain basic frequency distribution to a child.

    The ONS told me that other measures are used as simple evasion – Gini is the main one used worldwide and measures like the S80/S20 ratio suffer from the same flawed logic.

    I attached a chart for people who are no good at numbers. Please look at this income distribution chart (made as part of the video presentation to the ONS). How can (an ideal?) country with only a 6:1 ratio of income distribution (6 x richest income to poorest) – with a much more even spread – be the same inequality as the UK? Even those bad at maths can see the Gini is rubbish for comparing inequality within a country and useless for comparing one country to another. Just how is the UK the same inequality?

    The UK income distribution looks nothing like that – the rich end shoots up making even the average income of the population look tiny in comparison. Looking quite similar to the ‘one person has all income’ Lorenz curve. I am quite certain you get my meaning.

    In light of previous exchanges I am guessing that you (through your staff) will say ‘it is the best measure we have’ or something similar. The truth is it is not the best anything – except misleading and deception. I hope it is not too obvious that I was/am angered by the behaviour that I have received from your staff thus far.

    My chronic pain has not improved but still feel this needs asking – especially with the Conservatives getting back in power. So the question again is – will you revaluate Designation as National Statistics for the Gini coefficient – or are you still willing to let the public be misled and deceived in your new job?

    Yours sincerely

    Garry Anderson


  13. John
    May 21st 2015, 3:39 am

    Dear Garry
    I have read your latest e mail (reference your letters to Mr Pullinger & the ONS). You certainly have a far greater understanding of all the issues involved than I shall ever have. However, your last paragraph & your web site references somewhat alarmed me. I see that you are quite disabled, in pain & yet manage to find the time to be involved in matters like what you wrote for this Touchstone article. I take my hat of to you.

    I really hope that you get a positive reply from either Mr Pullinger &/or the ONS!

    With best regards to you & your family.

  14. Garry Anderson
    May 21st 2015, 10:54 am

    John – your post “somewhat alarmed me”.

    You will have also read that this little half hour video took months – four to be exact.

    My email to Pullinger is poor (as are the others sent) – there are many mistakes that make it look unprofessional. Not of the standard I would have sent at work.

    I am sure you are not saying that the sick and disabled must not vent their anger and legitimate complaints on forums. Just you are concerned that I am too clever for my own good.

    However, this sounds like something the Tories would say – that if you can press a button you can go to work.

    In my defence – I feel attacked – I tried hard and had brief mental problems when I was told I could not work – before coming to terms with it. Brief history (very).

    I almost died when trying to return to work after an operation went wrong.

    I tried again, doing part-time therapeutic work, but had to quit because of the chronic pain, other medical issues and the stress of work. Actually, the works doctor told me if I could not increase my hours that I’d be sacked.

    Because my health worsened the DWP basically accused me of fraud for not getting better.

    The actual DWP quote is, “The Adjudication Officer has judged that because the work proved to be injurious to Mr Anderson’s condition, it should not be treated as therapeutic work.”.

    My health was later assessed independent and by work enabling me to get early retirement on health grounds.

    I have a very good mind and like to keep it occupied – use it or lose it – hence the skilful and skilled websites. I happen to believe that most people can easily increase their IQ with little training.

    Since getting domains my health has worsened again. I have had an aneurysm burst in my chest – only surviving because of being on MRI at hospital at the time.

    I have since been told that I have another large aneurysm growing – getting near the stage when it needs operating on – were it not too difficult. The artery split from my chest to stomach – because of this they are leaving it later than they normally would.

    Think about the fact that work is more than chatting about something you are interested in. It is about timeliness, accuracy, reliability and many other factors. Go to an interview and any manager will tell you chatting on a forum about your hobby is not a qualification.

    I could never guarantee to getting to work or even consider working a Zero Hour Contract.

    I ask that you reconsider this stereotype. It is most unhelpful to the disabled – there have been many attacks due to people who think that way. Though I know you are certainly not one of these – nor am I implying it. Please do not take this post the wrong way.