Britain, the rich are richer but the poor far poorer than in Europe
When calamity strikes, people on low incomes face the toughest time and in the UK their margin of comfort is thinSun 25 Apr 2021 04.20
Ask an economist how unequal the UK is and they’ll answer by reeling off our nation’s Gini coefficient – currently 33.5. This will not help you much. Sometimes, they’ll note this is a high level of inequality, compared with 33.1 in Germany or 28.5 in France. That will provide a sense of ordering – UK income inequality is high – but not much by way of meaning. Gini chat is not exactly what our newly reopened pubs are full of. So this week’s Insight comes in chart form to illustrate what abstract talk of different inequality levels means and why it matters.
Typical households in the UK, France and Germany have remarkably similar incomes – around €34,000 in 2018. But those similarities hide big differences. The rich here have incomes 17% higher than their equivalents in France, a kind of inequality many can live with.
But no one should be happy with the fact that our poorest households have to survive on incomes a staggering 20% lower than those across the Channel (£14,700 v £18,500). That means higher poverty, lower living standards and no margin when things go wrong, such as a pandemic hitting. The point? Inequality isn’t about statistics – it’s about the lives we live and the societies we inhabit. If you want to level up, it’s not hard to see where you need to start.
• Torsten Bell is chief executive of the Resolution Foundation. Read more at resolutionfoundation.org