UK Super-Rich Get Richer as Pay Gap Widens
By Timur Moon | February 11, 2013 3:25 AM EST
The top 1 percent of Britain's earners pocket 10p of every single pound the nation earns, while the poorest 50 percent take home only 18p between them, according to a report published this week into Britain's widening inequality gap.
The top 1 percent of earners have seen their pay rise by 3p, from a total of 7p in every pound earned in the UK in the mid-1990s, while the bottom 50 percent has seen its earnings fall by 1p over the same period, according to the report by the Resolution Foundation thinktank.
"If we take the longer view, we see the very wealthiest have continued to prosper, while many others have not," said Matthew Whittaker, senior economist at the Resolution Foundation.
"The growing gap in incomes is pronounced when you look at the top 10th of households, and overwhelming when you consider the position of the top 1 percent.
"The rest of society hasn't kept up. It's the squeezed majority, not just the squeezed middle."
Earnings for the super-rich dipped between 2009-11, but analysts suggest this was due to the highest-paid employees bringing their earnings forward to avoid the 50p top rate of income tax on earnings above £150,000. Chancellor George Osborne has cut the top rate to 45p from April 2013.
The Organisation for Economic Co-operation and Development has warned the government of the dangers of rising inequality. "Labour market conditions are widening the income gap between full-time employees and an increasing share of the workforce on part-time, insecure and low-wage jobs," the OECD said. "This comes in a context where income inequality was already high and rising before the recession."
Labour leader Ed Miliband has called for a "pre-distribution" policy to narrow the income gap, while deputy prime minister Nick Clegg called for a "mansion tax" on homes worth more than £2million. Others have backed plans to introduce a Living Wage of £8.55 an hour in London and £7.45 elsewhere.
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