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Inequality and the top 10%

Discussion in 'off topic' started by sean99, Oct 13, 2021.

  1. sean99

    sean99 pfm Member

    https://www.vox.com/the-goods/22673605/upper-middle-class-meritocracy-matthew-stewart

    This hits VERY close to home for me. I'm almost certainly in the top 10%, but still do not feel secure. I live a pretty modest life, but worry that my daughter will lead a life of poverty on account of her learning disabilities. I'm one of life's winners, but it sure doesn't feel like it, because the healthcare system and lack of social safety net means that financial advisers will tell you that a couple needs $2 million to have a secure retirement, and be able to pay their medical and care bills.

    I live in a town that he describes - over parented, over-achieving kids, mostly headed to prestigious colleges, but as much as it's an achievement it's a necessity, because there is no longer a middle class, and failure to get a good degree means a high possibility of a life of financial vulnerability.

    The book was written about the US, but I suspect it's pretty true for the UK (though you don't have our awful, parasitic healthcare system). Even if you are a winner, unless you're in the 1% and have no conscience and no kids you're not really a winner.

    Ugh - how to fix it ? Clearly NOT voting Republican / Conservative is a necessary pre-requisite, but also clearly not sufficient.
     
    S-Man, TheDecameron and Le Baron like this.
  2. stevec67

    stevec67 pfm Member

    We are more fortunate in the UK, we have some form of safety net, at least for now. Universal free health care, free at the point of use. Not perfect, but better than nothing.

    I'm certainly top 10%, though I'm not wealthy. I do however feel lucky. I spent enough time unable to work and living in a tough bit of Leeds to be very happy when I could leave it for a nice suburb with a college lecturer, an accountant and a retired copper for neighbours.
     
    Sloop John B and dan m like this.
  3. Mike Reed

    Mike Reed pfm Member

    Can't see facts and figures signifying disposable income, assets etc. so wouldn't have a clue in which very indeterminate % group I fit. Despite being a house-owning senile citizen with modest pensions (<£14K p.a.), whatever confidence I had two years ago has been eroded by Covid and its far-reaching negative consequences (esp. for health and dentistry), the dodgy economic outlook, the bankrupt state of the nation and the increasingly bellicose direction globally.

    In some ways I admire the callow section of our population, whatever their age range, for maybe they can't see or comprehend the parlous state we find ourselves in. Wisdom does come of age, but it seems that negativity isn't far behind.
     
    Sloop John B likes this.
  4. Vinny

    Vinny pfm Member

    The top 10% contains very many ordinary folk - something that the "tax the rich to get us out of this financial hole" mob neither appreciate nor understand.

    99% of UK tax-payers are paid less than £175K, only somewhat more than 10% are paid less than £15K. The top 10% of UK tax-payers are paid more than around £55K. Average UK pay is now a little over £30K. There are around 32 million UK tax-payers.

    Taxing the "rich" raises diddly-squat money in the overall scheme of things, even if they didn't, perfectly legally, avoid any increased taxes by declaring the income outside of the UK.
     
  5. paulfromcamden

    paulfromcamden Baffled

    There's also this: "They’re rich, but they don’t feel like it — they’re always looking at someone else who’s richer."
     
  6. Mystic Mac

    Mystic Mac cauliflower ears not golden ears....



    Unless it is tackled we will see continued growth of inequality that will bring with it much misery, and unrest. Inequality is Prof Danny Dorling’s expertise.
     
    Heckyman and PhilofCas like this.
  7. laughingboy

    laughingboy pfm Member

    An IFS report from 2008 estimated that the top 0.1% is a group of 42,000. That group has a mean income of £780k. Mean income AFTER tax is over £500k. Mean post-tax income for all earners was less than £20k. Note: this does not include capital gains, etc - just income tax.

    Perhaps you are right about 'revenue raising' (if that's how the monetary system works). But the problems are not really about income, but wealth: what does it do the opportunities and life experience of those not in the 0.1% when the assets and resources of the country are effectively sequestered by a few via such a disparity? And what does it do to our politics, justice system, etc. when power (in the form of wealth) is so heavily concentrated?
     
  8. sean99

    sean99 pfm Member

    Not if it's a wealth tax -which would be much more progressive than an income tax.
     
  9. davidsrsb

    davidsrsb pfm Member

    Most of this group have FAR more money overseas or masked as land assets in trusts
     
  10. sean99

    sean99 pfm Member

    Me too. I'm tremendously lucky to have been born reasonably intelligent, into a middle class family who valued education and encouraged me, and in a country and time in history where a 10 stone weakling with a decent brain can do pretty well.
    However I don't feel relaxed because I live in a country where a bout of ill health or an accident, or heaven-forbid, early onset Alzheimers could bankrupt my family. I also worry a great deal about the society that my daughter is entering, even aside from global warming. I fear that she may not survive in the winner take all society as I was able to.

    So I think there's a distinction between feeling lucky/grateful, and feeling at ease / relaxed / optimistic.
     
  11. PaulMB

    PaulMB pfm Member

    The other day I looked up the address where my family lived (renting, paid by my father's company) in the late '50s and '60s in London. Some of the flats are now for sale (freehold) and prices range from £2.8 million to £8.0, depending on the number of rooms. These were nice, comfortable, upper-middle class flats. But in London, in areas like Kensington, Belgravia, Mayfair, Hampstead, Highgate, Notting Hill, Westminster, Chelsea, along the Thames, etc. there must be hundreds of thousands of homes of similar size and comfort. Not to mention suburbs like Wimbledon or the many small towns around around London like Lewes or Walton-on-Thames. So this means that there are literally millions of people, in the UK south-east, who live in homes worth several million pounds. Then there is the rest of the world, Paris, Rome, New York, and so on. In Tel Aviv the asking price for a 200 square meter flat with a sea view is in the several millions. In Viareggio, in Tuscany, there are several boatyards that each year turn out several massive motor yachts that cost from $20 million upwards. That is just Viareggio, there are dozens of similar boatyards all over the world.
    So I wonder about the "10% statistic." Does it include, say, 3% who are not ultra-rich like Bezos. but a kind of new, and largely anonymous, but very numerous "middle-class" of people worth a few hundred million?
     
  12. RJohan

    RJohan pfm Member

    In a Swedish study, done ten years ago, they checked people who had $1 million in fortune (not counting the worth of the persons dwelling) and how they got there. It was hard to tell any specific recipe, but one thing was clear: It had nothing to do with education!

    I've said it before: Being ultra rich today isn't much. You might afford a 250 mph Koenigsegg, but there is the same speed limit for you as the average punter. You can live in Monaco, in a multi million flat that's so small a student would sneer at it. You can fly business class, but the plane leaves and arrives at the same time as for the poor ones in tourist class.
     
    Linds likes this.
  13. ks.234

    ks.234 pfm Member

    The top 10% are not ordinary. They are, by definition, separate from 90% of the population. And as the gap between rich and poor has been growing for decades and accelerating more recent, that separation is greater.

    The top 10% will only seem ordinary if you are surrounded by them
     
  14. Tony L

    Tony L Administrator

    You could say exactly the same about the bottom 10%. Or split it however you want; top 33% and bottom 33% could be ostracised as ‘winners’, ‘losers’ or whatever and only the middle 33% being the ‘average’ or whatever. I don’t think any of it is helpful language.

    PS The key problems are a) not having a functioning democracy, and as a result, b) not having an adequate fair and progressive taxation system to fund essential infrastructure and services.
     
    Richard Lines, kensalriser and sean99 like this.
  15. Vinny

    Vinny pfm Member

    Read what I wrote again - I said some. Besides which, VERY many perfectly ordinary shift-workers in industry hit £50K per year, especially if they have got a rung or two up the ladder.

    So their total income, back then, was 33 billion. This year the UK exchequer will receive something like 870 billion.

    So far as Danny Dorling's observations go - just a couple of observations - time after time after time, after time farmers producing crops that have to be harvested by hand have been quite voccal about how UK residents just do not want to do the hard work and the great majority of those that pitch-up, pack-up as quickly. Many of the jobs pay way up into the £20'sk and even over £30K, but are seasonal.
    A friend followed his father into the trade of slaughterman. He got out around 5 years ago because ex-eastern block workers would take the job at far less money. There was hardly an English voice left in the place. There is now a huge shortage of abatoir workers.
    Now that lorry-drivers are in short supply, in part only due to the exit from the UK of European drivers, pay HAS increased, in some cases enormously.

    Who pays for the increased pay rates? The extra money isn't summoned by use of a magic wand.
     
  16. ks.234

    ks.234 pfm Member

    Yes, but my only point was that the top 10% are not ‘ordinary’. By definition, the bottom 10% are not ordinary either, but I wasn’t arguing that they are.

    The far more important point though is that taxation does not fund essential services. The fact that we have poor public services is down to a political choice, not the lack of money in a mythical piggy bank
     
  17. ks.234

    ks.234 pfm Member

    Apologies, what you seem to mean then is that an unknown proportion of a known proportion has certain properties of their own which do not therefore reflect the properties of the known proportion

    No, not a magic wand. Just a few keystrokes of a computer.
     
  18. Ponty

    Ponty pfm Member

    I used to work with many US colleagues in this position (tech industry). The organisation was a complete meritocracy. Incredibly bright, dedicated, motivated, hard working people who were bloody good at their jobs (they had to be or they were out). They were very well paid and earned every cent. However, I always had the sense they were living in fear that it could all unravel very quickly unless they kept pushing as hard as they possibly could.

    A (US) guy I worked with had a heart attack at 35. He told me it was basically a result of 10 years living in hotels all over the world, out for big dinners most nights, drinking far too much and effectively working 24/7 getting the business done. It was his life and he hardly saw his family. We even had a ‘road warrior’ status in the company, given to people like this who did over an obscenely high number of flights per year, something ridiculous like 200. Thankfully he sorted himself out and now has a far more balanced life but you can see how the culture pushes people down this road.

    In the UK, it is possible to carve out an extremely content, independent lifestyle on not a huge amount of money. This is down to the fact that we have the NHS and social security. From what I’ve seen, it’s extremely difficult to do this in the US.
     
  19. ks.234

    ks.234 pfm Member

    No, public spending is not responsible for poor living standards. It is possible to have the content living styles you speak of and properly funded public services. The fact that we do not is a political choice.
     
    Le Baron likes this.
  20. PaulMB

    PaulMB pfm Member

    It really all boils down to what one considers an "ordinary" or "normal" or "middle class" lifestyle, income and property. For instance, would a person who has £1 million in property, £1 million in securities, and earns £60,000 a year be "ordinary" and "normal" in a developed country?
     

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