During the three decades after World War II ... incomes in the United States rose rapidly and at about the same rate — almost 3 percent a year — for people at all income levels.

America had an economically vibrant middle class.

Roads and bridges were well maintained, and impressive new infrastructure was being built.

People were optimistic.

By contrast, during the last three decades the economy has grown much more slowly, and our infrastructure has fallen into grave disrepair.

Most troubling, all significant income growth has been concentrated at the top of the scale.

The share of total income going to the top 1 percent of earners, which stood at 8.9 percent in 1976, rose to 23.5 percent by 2007, but during the same period, the average inflation-adjusted hourly wage declined by more than 7 percent.

Yet many economists are reluctant to confront rising income inequality directly, saying that whether this trend is good or bad requires a value judgment that is best left to philosophers ...

There is no persuasive evidence that greater inequality bolsters economic growth or enhances anyone’s well-being.

Yes, the rich can now buy bigger mansions and host more expensive parties. But this appears to have made them no happier.

And in our winner-take-all economy, one effect of the growing inequality has been to lure our most talented graduates to the largely unproductive chase for financial bonanzas on Wall Street.

In short, the economist’s cost-benefit approach — itself long an important arrow in the moral philosopher’s quiver — has much to say about the effects of rising inequality.

We need not reach agreement on all philosophical principles of fairness to recognize that it has imposed considerable harm across the income scale without generating significant offsetting benefits.

No one dares to argue that rising inequality is required in the name of fairness.

So maybe we should just agree that it’s a bad thing — and try to do something about it.

Robert H. Frank is an economics professor at the Johnson Graduate School of Management at Cornell University.

NYT  16 Oct 2010    The Middle-Class Squeeze

In The Spirit Level, two sober academics – Richard Wilkinson and his partner Kate Pickett, both medical epidemiologists – have published strong evidence to prove that in unequal societies everyone suffers – even those who think they have it made for generations to come.

They looked at 20 of the richest nations and compared various social and health problems, measuring those against an index of equality.

The US, Portugal (feudal in the near past) and the UK are the most unequal nations, with the top 20 per cent earning nine times more than the bottom 20 per cent.

Japan, Finland, Norway and Sweden are where the money gap is smallest.

Teenage pregnancies, mental illness, life expectancy, obesity, illiteracy, homicide, crime are all worse in the states of greater inequality and not only for the poorest but for all citizens and residents.

Spain is more equal than its neighbour, Portugal and you can see how vastly different are the social ills in the two countries.

There is even evidence that in unequal societies, the people have higher levels of stress hormones ...

The US spends more on healthcare than anywhere in the world but a baby in Greece has a higher life expectancy than a baby in the planet's the richest nation.

The prison population in Britain has doubled since 1990 and quadrupled in the States since the 1970s.

Trust and cohesion are abysmally low in these states. The sense of injustice on the one hand and paranoia on the other makes social ease impossible ...

Yasmin Alibhai-Brown

Independent  23 March 2009

It is in the countries most committed to what British-based criminologists Michael Cavadino and David Dignan describe as "minimal and residual, mainly means-tested benefits with stigmatised entitlement" that prison populations are highest. Research by the men confirms there is "an almost watertight divide between the different types of political economy as regards imprisonment rates" in a study of 12 contemporary capitalist countries.

... a new publication from think-tank the Crime and Society Foundation makes matters more explicit. Examining research across US states, then replicating it across 18 OECD countries including the UK, the foundation has found an intimate link between the amount of welfare spending and the level of imprisonment. The seven countries with the highest imprisonment have the lowest rates of welfare spending, while the eight with the highest welfare have the lowest imprisonment rates. ...

Deborah Orr - The Independent 22 November 2006

Big banking sector amplifies risk of inequality

In a series of chapters for the forthcoming publication Going for Growth, Journard outlined Britain's weaknesses.

Almost one in five of people aged between 25 and 34 do not have five good GCSEs (or their equivalent), and academic performance is dramatically affected by parental performance, much more so than in other comparable rich nations.

Another issue, said Journard, was that 40% of women were in part-time employment – 15% higher than average among rich nations – which was "almost certainly" related to the fact the UK had some of the highest childcare costs, equivalent to more than 45% of the average wage.

The OECD called for education spending to be better targeted so the poor benefited more from proposed reforms. "The pupil premium is a good idea but we still feel that it could do more to benefit disadvantaged students," it said.

It also called for a shakeup of the way housing is taxed, questioning why house sales did not attract capital gains tax ...

Duval said Britain's council tax regime was "highly regressive" and needed reform.

"In England, the tax liability for properties over £320,000 is only twice the liability for properties of £70,000 and three times the liability for houses under £40,000. Low-income households are entitled to a council tax benefit. However, the takeup is only around 65%."

Duval said the OECD advocated a replacement with "a property tax based on current market values or a land tax".

Gdn  23 Jan 2012    Education Log    George Osborne    Whither Britain? Log

Even more than Britain, the United States has experienced the emergence of an arrogant and deracinated “overclass” of super-rich.

Economists say that the super-rich in the United States are now seven times better off than they were 30 years ago.

Troublingly, this massive growth of wealth and power has come directly at the expense of ordinary people.

Statistics show that the income of the average working male in the United States has flatlined since the 1970s.

This sharp division of wealth has been accompanied by an even more troubling phenomenon: the ideals of the founding fathers have been shattered as class divisions in the US have widened beyond anything seen in Victorian Britain.

Social mobility is in the process of grinding to a halt, as the American sociologist Charles Murray has exposed in a brilliant new book, Coming Apart.

Murray exposes how the new United States upper class, which he labels a “cognitive elite”, has developed an hereditary stranglehold over the top professions and management positions.

The brightest people tend to marry each other, then ensure that their offspring get to the best schools and universities, with the result that, to quote Murray: “The parents of the upper-middle class now produce a disproportionate number of the smartest children.” ...

Tel  20 Jan 2012    Blog    Economic Democracy

Inequality, Consumerism & Biodiversity

Income Inequality: Too Big to Ignore

Charity chair pledges to track how cuts are affecting poverty levels

With all the main political parties hell-bent on refashioning the welfare state to reduce its spiralling costs, by siding with hardworking people (the deserving poor) and labelling anyone else as benefit scroungers (the undeserving), it is reassuring to learn that at least the UK's leading voice in social policy research is not adopting this invidious rhetoric ...

Over the next three years, the [Joseph Rowntree Foundation] will pump £23m into research in three main areas: identifying the root causes of poverty and injustice, supporting communities where anyone can thrive, and planning and developing for an ageing society.

In particular, it will track how the coalition government's public spending cuts are affecting levels of poverty and inequality, and how disadvantaged people are coping, or not; the foundation will help to develop practical solutions to reducing poverty ...

Of working across the foundation ... the majority as care workers, many on the minimum wage.

The trust wants to pay ... [its 800 staff] ... something called a "minimum income standard" ...

"We don't yet have a final figure, but it will be way above the minimum wage," he says.

Similar to the living wage then, which is £8.30 in London and £7.20 outside of the capital and designed to provide every worker and their family with the essentials of life?

"Yes, the same sort of thing," he replies ...

Gdn  12 Jan 2012    Economic Democracy    What is to be done? Log

Minimum wage

Poverty

Social exclusion

Britain's poorest hit by £2.5bn 'stealth tax'

George Osborne, the Chancellor, increased the personal tax allowance from £6,475 last year to £7,475 in the current financial year, and it will rise to £8,105 in April ...

But basic-rate taxpayers will gain by a "very small" £41-a-year after the April rise in tax thresholds, according to the think tank – which describes it as "a relatively inefficient way of targeting the low to middle-income group because those on higher incomes also benefit" ...

Matthew Whittaker, senior economist at the Resolution Foundation, said:

"April's personal allowance increase will undoubtedly benefit low-to-middle income workers, but millions of families will find that any gains will be dwarfed by cuts in their tax credits ...

Ind  27 Dec 2011    Falling Living Standards    George Osborne

Incomes fall for fifth year in a row says Bank

The 'news' comes to you courtesy the very body that is supposed to control inflation.

The Bank's survey found the amount the average household had to spend each month, after tax, bills and housing costs, fell by £46 over the year.

The Bank blamed rising VAT and energy prices, as well as government cuts for the fall.

It comes as another survey by Deloitte found one in five UK households saw their income drop in the last quarter.

This was due to higher unemployment, loss of bonuses, a reduction in overtime and more part-time working, said the consultancy and accountancy firm ...

"A fierce squeeze on disposable income and high levels of macroeconomic volatility pushed the consumer sector back into recession in 2011," said Ian Stewart, Chief Economist at Deloitte.

"The UK has generated far higher levels of inflation over the last year than any other industrialised nation, and this has hit consumer spending power." ...

BBC NEWS  19 Dec 2011

Households run up debt to fund Christmas despite job fears

Tim Moore, senior economist at Markit, said:

"December's survey rounds off a year in which the aftershocks of the recession have hit UK household finances with unprecedented force.

"Weak labour market conditions, ongoing austerity measures and heightened inflationary pressures all contributed to a near-record deterioration of household finances in December.

"Things are expected to get worse before they get better, with more than twice as many households downbeat about their financial prospects for 2012 as those that foresee an improvement."

"With real incomes down around 3% since last year, households are opting to dip into savings or take on more debt in the run-up to Christmas," said Moore.

... some retailers are insistent that they are bucking the depressing trend.

John Lewis, the department store, said sales in the week to Saturday rose 10.6% on the same week last year to £133.1m, which in turn was a 7.8 % increase on the previous week's £123.5m ...

Gdn  19 Dec 2011    Falling Living Standards    Whither Britain? Log

The City must do more to convince taxpayers that it matters

The report shows that while 4% of the UK workforce is in financial services, the amount paid through employment taxes is 12.6% of the total received by the government.

The average wage was £41,722 compared with the UK national average was £23,381.

Compared with the previous year, the amount of total tax is 18% higher as financial firms pay more VAT and corporation tax.

Even so, the Corporation of London might have a hard time convincing the wider public that the City matters enough for David Cameron to be using vetos in Brussels.

This sector pays about the same in corporation tax relative to North Sea oil companies but less than half paid by industrial and commercial firms.

Yet, taxpayers are still on the hook, supporting banks – and still nursing heavy losses on their stakes in the ones that were bailed out in 2008.

Voiceofferney 16 December 2011 5:25AM

The audacity is staggering...

If the Corporation of London believes that by throwing in a 'big' figure (£63bn) it can hoodwink anyone into believing that "the City" is paying its way, it is very much mistaken.

The numbers, by themselves, are staggering:

- City average wage £41,722 - UK national average £23,381 - Corporation tax £7.2bn, down 40% from 2007. - Banks themselves paid £3.5bn, down 52% from 2007.

Last month HSBC reported a year-to-date profit before tax (PBT) of $18,629m on which they paid $3,346m tax (17.9%).

In the corresponding period last year they reported a PBT of $14,629 but paid $3,954 tax (27%).

So despite earning 27% more profit they've paid 15% less tax...perhaps this is why the PM feels he needs to "protect the City"...

Gdn  16 Dec 2011    A free market train wreck    Bankocracy Log    Whither Britain? Log

A warning from China

Sharp increase in income inequality

The study - Divided We Stand: Why Inequality Keeps Rising - published by the forum of 34 countries that earn the most, said the annual average income of the top 10% was almost £55,000 in 2008, nearly 12 times higher than that of the bottom 10%, who earned an average of £4,700.

This is up from a ratio of 8 to 1 in 1985, the OECD said.

Data showed the money earned by the country's top 1% of earners doubled from 7.1% of the total UK income in 1970 to 14.3% in 2005 ...

In order to combat the problem, the OECD said: "Work is the most promising way of tackling inequality.

"The biggest challenge is creating more and better jobs that offer good career prospects and a real chance to people to escape poverty." ...

"This must begin from early childhood and be sustained through compulsory education," it concluded.

"Once the transition from school to work has been accomplished, there must be sufficient incentives for workers and employers to invest in skills throughout the working life." ...

Ind  05 Dec 2011

“Be Nice to the Countries That Lend You Money”

About Wall Street jobs, wealth, and the cultural distortion of America

I have to say it: you have to do something about pay in the financial system. People in this field have way too much money. And this is not right.

When I graduated from Duke [in 1986], as a first-year lawyer, I got $60,000. I thought it was astronomical! ...

Today those people fresh out of law school would get $130,000, or $150,000. It doesn’t sound right.

Individually, everyone needs to be compensated. But collectively, this directs the resources of the country. It distorts the talents of the country.

The best and brightest minds go to lawyering, go to M.B.A.s. And that affects our country, too!

Many of the brightest youngsters come to me and say, "Okay, I want to go to the U.S. and get into business school, or law school."

I say, "Why? Why not science and engineering?" They say, "Look at some of my primary-school classmates. Their IQ is half of mine, but they’re in finance and now they’re making all this money."

So you have all these clever people going into financial engineering, where they come up with all these complicated products to sell to people ...

The Atlantic  December 2008    A free market train wreck    Economic Democracy    Whither Britain

Incentive to work has been cut, says Iain Duncan Smith

UK pay gap rises faster than other rich nations - OECD

Nick Clegg vows to get tough on excessive executive pay

A variety of looters

Switching on any channel carrying ads is to be bombarded by the 'have it all, have it now' consumer culture, which depends on credit for its existence.

As viewers we have been routinely encouraged to feel that owning the latest 'whatever' is vital to the enhancement of status and self-image.

The notion that the marginalised should be strong enough - stoical enough - to accept their failure to participate, is a counsel of perfection addressed to those least able to manage it.

The possibility that full - and fulfilling - employment might be the royal road out of this dystopia is unmentioned by the the Riots Communities and Victims Panel, as is the strong possibility that vastly unequal 'societies' vastly increase the difficulty of finding detachment.

City workers still banking on bonuses despite gloom

Based on average salaries of £83,000, a payout of 24 per cent would translate into a bonus of £19,920.

A managing director would receive a bonus of £166,000 if their expectations are realised based on an average salary of £237,000.

City workers have enjoyed rises of around 12 per cent to their basic pay, according to Astbury Marsden, at a time when most other workers are dealing with either below-inflation rises or pay freezes as the economy stumbles.

The higher expectations of those at managing-director level come because the more senior a banker is, the greater the proportion of pay linked to performance when compared with more junior staff.

At director level within investment banks the expectation on average is for a bonus worth 42 per cent of basic pay ...

Ind  28 Nov 2011

Consumerism and police failures to blame for scale of summer UK and London riots

The hypocrisy involved in blaming 'consumerism' is breathtaking, since it is the key source of corporate-created discontent.

A desire to “have what we want when we want” and "expecting something for nothing" drove the looters on to the streets in August, a review set up by the Government said.

It claimed consumerism and peer status through owning top brands had become a “new religion”.

Looters were able to raid thousands of shops and businesses because a failure by police to tackle the first disturbances encouraged others to go on the rampage.

The public felt “abandoned” by the police while a lack of action and apparent inability to contain the disturbances meant others were willing to “test reactions” elsewhere, the Riots Communities and Victims Panel found ...

“In the Panel’s conversations with communities and young people, the desire to own goods which give the owner high status (such as branded trainers and digital gadgets) was seen as an important factor behind the riots.

“In addition, the idea of ‘saving up’ for something has been replaced by the idea that we should have what we want when we want.” ...

Tel  28 Nov 2011    
A 'Greed is Good' Wealth Log    Blog    Economic Democracy    Riots    Third Meltdown Log

A Very Neoliberal Catastrophe    Family Breakdown    Neoliberal Consumer Culture

5 Days in August

Victorian Contrasts

Meal appeal targets 1m donations over Christmas

The One Million Meal Appeal, which will be launched on 26 November, gives customers the opportunity to add an extra store cupboard item ... which will then be delivered to local community projects by food poverty charity FareShare ...

The initiative was welcomed by minister for civil society, Nick Hurd, who said:

"Sainsbury's progressive initiative with FareShare will encourage consumers up and down the country to get involved in their local community and support the vulnerable and needy – it is a great example of the principles of Every Business Commits, this coalition government's strong belief that every business can play a positive role in society." ...

Gdn  24 Nov 2011

50p tax band will cost Britain £1bn a year

The tax is pushing Britain’s wealth creators beyond a “psychological threshold”, the Centre for Economics and Business Research warned ...

The CEBR said that up to 270,000 people who pay the top rate will find ways to reduce their liability by using tax-free savings products and investing in venture-capital trusts or enterprise-investment plans.

Others will invest in offshore bonds or leave the country altogether ...

Tel  23 Nov 2011
A 'modern and compassionate party'    A 'greed is good' wealth log    Whither Britain? Log

Communitarian Citizenship    Marginalised by Standortkonkurrenz    Unsustainable Burdens

Trussell Trust

Why has executive pay increased so drastically?

The 'trickle down' theory gets unscrutinised support ...

The High Pay Commission today reports on the 30 year trend of increasing top pay that has left the earnings gap between the very richest and the rest of society wider than at any point since Queen Victoria was on the throne.

The report identifies the early 1980s as the turning point when the pay gap started to grown rapidly ...

In the last year alone executive pay in FTSE 100 companies grew by 49%.

The report cites the example of Barclays, where top pay is now 75 times that of the average worker. In 1979 it was 14.5.

Over that period, the lead executive's pay in Barclays has risen by 4,899.4% – from £87,323 to a £4,365,636.

It was argued that to achieve the necessary dynamism those at the top of companies must be incentivised, and their interests must be tied to those of the shareholders ...

That wealth would then trickle down to the rest of society ...

Gdn  22 Nov 2011    A 'greed is good' wealth log    Corporate Sociopathy    John Redwood

Workers 'should be given powers' to help curb pay of top executives

Executive pay consultants behind escalating boardroom salaries

Recent trends are illuminating: in 1978, the head of British Aerospace was paid £29,000.

By 2010, the head of its successor company, BAe Systems, collected a package worth nearly £2.4m, a rise of 8,000%.

That compares with an increase of 556% in median male income over the same period.

But why has boardroom pay skyrocketed in recent years?

Critics point their fingers at the pay consultants appointed by remuneration committees at top companies, describing their relationship as being akin to a cartel.

Twenty years ago such firms did not exist and pay negotiations were thrashed out between the executive and the board with some help from lawyers.

There are now half a dozen specialist pay consultancies in the City whose sole job is to advise remuneration committees how much executives should be paid and how to structure their pay packages.

The consultants' fees are kept private but are in line with those charged by accountants and lawyers ...

A recent survey by Income Data Services found senior directors at FTSE-100 companies last year enjoyed a 49% pay rise, earning on average £2.7m – 113 times the national average of £24,000 for a worker in the private sector, where salaries have risen 3% in the last year.

The average chief executive saw their total payout jump by 43% to £3.9m.

And all this at a time when business groups are lobbying for the scrapping of the 50% higher marginal tax rate ...

Gdn  18 Nov 2011    A 'Greed is Good' Wealth Log    Corporate Sociopathy    Global Risks 2012
Is Capitalism the only game in town?    Third Meltdown Log

FTSE 100 directors' earnings rose by almost half last year

A question for the Archbishop of Canterbury, the Bishop of London and the Dean of St Paul's:

Whose side are you on, Gordon Gekko or Giles Fraser?

Total earnings for directors of FTSE 100 companies increased by 49% last year, far outpacing pay claims for workers outside the boardroom.

A FTSE 100 executive typically received an average of £2.7m in 2010, according to the research by Incomes Data Services, which analysed payouts of salaries, bonuses and long-term incentive plans the last financial year.

For chief executives, the average total pay deal was £3.8m – an average rise of 43.5% – while IDS calculated that finance directors received an average increase of 34.1%,to take their average to £2m, while all other directors received an average increase of 66.5%, to take their average to £2.2m.

The directors enjoyed such large increases in the total take-home pay as bonus schemes compensated for the average 3.2% rise in base salaries that they were awarded last year. Inflation is running at 5.2% while data from IDS shows that pay deals in the private sector are running at 2.6% ...

Gdn  28 Oct 2011    A 'greed is good' wealth log    
Corporate Sociopathy    In the absence of economic democracy    Third Meltdown

Top Earners Doubled Share of Nation’s Income, Study Finds

In praise of … Giles Fraser

Families lose £2,000 to inflation and low pay

In a report on poverty levels between now and 2020, [The Institute for Fiscal Studies ] forecast that the median or the midpoint in household incomes would fall by 7 per cent between 2009-10 and 2012-13.

This would mean that a typical couple with two children would be £2,080 worse off in 2013 in real terms than they were in 2010, as their real income falls from £30,056 per year to £27,976 ...

Not since the mid-1970s has there been a worse three-year fall in real incomes.

The institute said the failure to recover for at least six years has never been seen since current records began in 1961.

Robert Joyce, research economist at the institute, said the “big driver” behind the fall was the decline in earnings ...

Tel  10 Oct 2011

The poverty claptrap

Despite the targets in the Child Poverty Act for absolute and relative child poverty – 5% and 10% respectively by 2020 – our best estimate is that, on both measures, the rate of child poverty will in fact be somewhat above 20% in 2020.

It is difficult to imagine quite what policies could ensure the targets are met.

Two things might work. One is a colossal increase in benefit spending. But both the cost and the impact on benefit dependency make that highly unlikely.

The other is a remarkable transformation in the structure and performance of the labour market.

There is no plan for any such transformation, nor has one ever occurred over a period as short as a decade ...

Gdn  10 Oct 2011

Dear America – About the 1%, 53%, 99%, Class Warfare, Occupy Wall Street and ...

About the 1%. They won long ago. For them to continue to win they need class warfare constantly being fought.

Peace and calm do not define victory.

Division and distrust and discord are the means of assuring recurring victory in the episodic battles that wage to keep the 1% in power and in control of society’s direction and wealth.

Distract the many and try to manage the bothersome few ...

Bill4DogCatcher.com  10 Oct 2011    Falling Living Standards    Whither Britain? Log

Third Face of Power

Big Bang's shockwaves left us with today's big bust

Minimum wage harming job opportunities for young

Firms may be reluctant to create jobs by recruiting inexperienced staff because they are put off by the increased wage bill, the Low Pay Commission has suggested ...

New rates for the minimum wage took effect on Saturday. For 18-20 year olds, the minimum wage is now £4.98, up from £4.92.

For 16-17 year olds, the new rate is £3.68, up from £3.64.

Tim Butcher, the commission’s chief economist told the Daily Telegraph that the body is launching a new investigation into the role the minimum wage has played in Britain’s growing youth unemployment problem ...

Tel  02 Oct 2011    A 'modern and compassionate party'    Coalition Log

Falling Living Standards    Third Meltdown    Youth Unemployment

Low Pay Britain

Sharp rise in demand for food handouts

Working for nothing – the truth about low pay in the UK

In London, there is an official "living wage" … currently set at £8.30 an hour.

It's intended to be the least amount required to pay for what most people consider to be basic necessities and a "minimum acceptable quality of life".

Loughborough University's Centre for Research in Social Policy, considered the authority on the issue, calculates that outside the capital, you need £7.20 an hour.

Using official earnings figures, Resolution finds that in some parts of the country, almost a quarter of the workforce are taking home less than this.

They range across a wide range of sectors, from sales, where 60% of workers earn less than the living wage, to personal services such as hairdressers and childminders (33%).

"It brings to life just how pervasive low pay is in modern Britain," says Resolution's chief executive, Gavin Kelly. "Many people on higher incomes would assume it only exists on the fringes, not the mainstream."

Instead of being a short-term result of the recession of 2008-09 and the lacklustre recovery, Kelly sees the increasing problem of low pay as being the result of a long period when the fruits of economic expansion failed to feed through to those at the bottom of the pile ...

Obs  02 Oct 2011    Falling Living Standards    Third Meltdown    

Low Pay Britain

Sharp rise in demand for food handouts

House prices in prime locations breached £1m

Over the past three years since the collapse of Lehman Brothers triggered the financial crisis the average asking price has risen by 2.5%, compared to a 16.4% increase in the previous three years.

Demand is strongest at the high-end of the market, with almost 20,000 £1m homes on the market in the three months to the end of June.

While more than half of the 19,746 £1m -plus homes on estate agents' books were in London, the capital only ranked 41st in terms of density of £1m properties.

Beaconsfield ... tops the table with 47% of properties valued at more than £1m against 13% in the capital.

Next on the list is Virginia Water, Surrey (44%); Much Hadham, Hertfordshire, (38%); Radlett, Herfordshire (37%) and Chelsea footballers' and their wives favourite Cobham, Surrey (33%) ...

London retains the highest average asking price at £427,889, up 2.4% in the last month and 7.2% over the past year.

The cheapest region is the north of England, with an average asking price of £145,430 – a 2.6% fall over the past month and 4.2% down on last year.

Gdn  19 Sept 2011    A free market train wreck    Ponzi Housing Market    Wealth Log

George Osborne given stark warning on cuts' impact

A study from the Institute for Fiscal Studies, the UK's leading experts on the public finances, concludes that the chancellor's strategy will result in greater inequality and rising child poverty ...

The IFS analysis, included in a new international study into the impact of the "Great Recession" of 2008-09 on 21 wealthy countries, says the most severe downturn since the interwar years will "cast a very long shadow in the UK", with the poorest 30% of households especially hard hit.

"Declines in living standards look set to continue until at least 2013-14.

"If realised, this would mean that average living standards had not grown in well over 10 years, making it one of the worst decades for changes in living standards since at least the second world war." ...

Gdn  12 Sept 2011    Coalition Log    Falling Living Standards    'We're all in it together'    Whither Britain?

Childcare costs put parents in debt

Bosses' bonuses up by 187% since 2002

UK household squeeze at its worst for two years

Wage study shows rich-poor divide

Why the 'squeezed middle' is here to stay

UK households 'face £780 drop in disposable incomes'

If we're lucky, we'll only be 10 per cent poorer

Childcare costs put parents in debt

The survey of 4,359 parents found 58% had cut spending on other essentials like clothing, heating and other bills.

Nearly two-thirds said they could not afford not to work, but struggled to pay for childcare.

Four out of 10 families surveyed said the cost of childcare was on a par with their mortgage or rent.

The study suggests the cost of childcare has the greatest consequences for the poorest families.

Of those who completed the Daycare Trust and Save the Children questionnaire, 250 had an annual household income of £12,000 or less.

A quarter of these low-income parents said they had given up work and a third had turned down work because of childcare costs.

More than half (58%) of these families said they were no better off working and paying for childcare.

This compared to just 19% of those with household incomes of more than £30,000.

BBC NEWS  07 Sept 2011    Falling Living Standards    Has the coalition abandoned children?    

Bosses' bonuses up by 187% since 2002

Average bonuses for directors of FTSE 350 companies have risen by 187% since 2002, without a corresponding rise in share prices, new research suggests.

The High Pay Commission said on Monday that average annual bonuses were worth 48% of salary in 2002, but are now 90%.

Commission chairman Deborah Hargreaves said it was a "myth" that big bonuses meant companies performed better ...

During the time bosses' salaries rose by 63%, said the report, which is due to publish its full findings in November ...

The study also found that total pay packages for company executives in the wider FTSE 350 had gone up by 700% since 2002 ...

Pay levels for the average worker in Britain have risen by 27% over the past decade ...

BBC NEWS  05 Sept 2011    Bonus Culture    Corporate Sociopathy    'Greed is good' Wealth Log

Foodbank stocks hit nationwide low ...

The cost of a packet of pasta has risen by 111% in the last four years.

In the last 12 months the price of apples has risen by up to 31% and butter by 60%.

For many on low incomes, static wages combined with inflation are forcing them to go without food at the end of the month.

Foodbank Network Director Jeremy Ravn says:

'Many foodbanks across the UK are seeing food stocks go out faster than they come in as families struggle to cope with rising food prices. We really need more food donations'.

On Monday Jenny sat on her sofa cuddling her 18 month-old son and told me that all she had left in the cupboard was a tin of tomatoes and packet of pasta.

Her husband, a trainee architect, is working overtime to help them make ends meet but times are tough.

Jenny says 'the cupboards were bare. If it was just me and my husband we could survive on beans on toast, but I need to give my son fruit and vegetables.

'We're working hard but we can't cover the bills. Something small like my son being ill and needing a few extra things can push us over the edge.

'Initially I was embarrassed to go to the foodbank, but it was so helpful and such a huge relief.'

Jenny is not alone. Foodbanks nationwide are experiencing a huge demand for their services and many need extra supplies to meet the need.

Trussell Trust email  19 Aug 2011    FYB Log

The Third Meltdown

Trussell Trust

Record rents trap tenants in a vicious circle

Rents in England and Wales rose for the sixth month in a row in July to a record high of £705 a month, plunging struggling first-time buyers into a "vicious circle" with spiralling rents making it impossible for them to save the deposit to buy a home ...

Jonathan Moore, director of Easyroommate.co.uk, said ...

" ... many renters are cutting costs by turning to flatshare, and this sector of the market is growing.

"Demand is now so strong that four tenants compete for each room available, and room rents have risen by 1.4% in the last month alone – more than twice the rate of the wider rental market." ...

Gdn  19 Aug 2011    Ponzi Housing Market    

'I want families to keep their money'

Eric Pickles reveals split in coalition over Lib Dems 'mansion tax'

Eric Pickles, the communities secretary, has highlighted a rift in the Conservative-Liberal Democrat coalition by describing proposals for a so-called "mansion tax" on expensive property as "a very big mistake" ...

The proposal did not make it into the coalition agreement.

But it has not been forgotten and Vince Cable, the business secretary, said in his speech to the Lib Dem conference last year that, given the difficulty of raising taxes on income in a world of mobile labour, "a progressive alternative is to shift the tax base to property and land" ...

Gdn  19 Aug 2011    Eric Pickles    Land tax, Fair Tax    Trickle-Down

England rioters: young, poor and unemployed

A Liverpool University urban planning lecturer, Alex Singleton, analysed the Guardian's preliminary data by overlaying the addresses of defendants with the poverty indicators mapped by England's Indices of Multiple Deprivation, which breaks the country into small geographical areas.

He found that the majority of people who have appeared in court live in poor neighbourhoods, with 41% of suspects living in one of the top 10% of most deprived places in the country.

The data also shows that 66% of neighbourhoods where the accused live got poorer between 2007 and 2010 ...

Gdn  18 Aug 2011        Riots    Youth unemployment

England's rioters: did many 'pillars of the community' take part?

Quantitative easing 'is good for the rich, bad for the poor'

As the Bank of England considers unleashing a fresh round of QE, Dhaval Joshi, of BCA Research, argues the approach of creating electronic money pushes up share prices and profits without feeding through to wages.

"The evidence suggests that QE cash ends up overwhelmingly in profits, thereby exacerbating already extreme income inequality and the consequent social tensions that arise from it," Joshi says in a new report.

He points out that real wages – adjusted for inflation – have fallen in both the US and UK, where QE has been a key tool for boosting growth.

In Germany, meanwhile, where there has been no quantitative easing, real wages have risen.

As the Bank waded into the financial markets to spend its £200bn of newly created money, mostly on government bonds, the price of many assets, including shares and commodities such as oil, was driven up.

That helped to boost companies' revenues, but Joshi argues that with the labour market remaining weak, employees have had little hope of bidding up their wages.

"The shocking thing is, two years into an ostensible recovery, [UK] workers are actually earning less than at the depth of the recession.

"Real wages and salaries have fallen by £4bn. Profits are up by £11bn. The spoils of the recovery have been shared in the most unequal of ways."

Joshi adds that this also helps to explain why sales of high-end luxury goods have continued to soar, while many consumers have been forced to tighten their belts ...

Obs  14 Aug 2011    QE

Another way to reward the fat-cat directors

The headline figures are that the average FTSE 100 director is in line for a pension worth £175,000, 29 times more than the rest of the workforce.

And while two-thirds of guaranteed final salary pension schemes have been closed to the rank and file, 97 per cent of FTSE 350 companies have kept such plans for their directors.

A case of do as we say, not do as we do ...

One further thought: company directors are enjoying a disproportionate share of the enormous taxpayer subsidy for private pension provision.

Since they get so much more in both pay and pension benefits than their staff, the cost of giving them pensions tax relief is also so much higher ...

Ind  09 Aug 2011    Corporate Sociopathy    'Greed is Good, Greed Works' Log    

London riots: the underclass lashes out

The difference between a rioter and a 'white collar criminal' - like an MP bilking the taxpayer - is that the damage caused by the latter does not - usually - involve the fire services, or other damage to property.

But the absence of a moral compass is exactly the same, and wider damage to society - and the increasing cynicism about the ruling élite - is compounded by the gargantuan greed which they, and their corporate 'friends', aggregate to themselves.

They are not best placed to indulge in moral outrage.   

The social Darwinism at the centre of neoliberalism further confirms the degredation of previous ethical systems, which emphasised the social norms which are now absent from both ends of what now passes for society post-Thatcher. [APWCC]    [GiGW]    [WS]

It is no coincidence that the worst violence London has seen in many decades takes place against the backdrop of a global economy poised for freefall.

The causes of recession set out by J K Galbraith in his book, The Great Crash 1929, were as follows: bad income distribution, a business sector engaged in “corporate larceny”, a weak banking structure and an import/export imbalance.

All those factors are again in play. In the bubble of the 1920s, the top 5 per cent of earners creamed off one-third of personal income.

Today, Britain is less equal, in wages, wealth and life chances, than at any time since then.

Last year alone, the combined fortunes of the 1,000 richest people in Britain rose by 30 per cent to £333.5 billion ... successive British governments have colluded in incubating the poverty, the inequality and the inhumanity now exacerbated by financial turmoil.

Britain’s lack of growth is not an economic debating point or a stick with which to beat George Osborne, any more than our deskilled, demotivated, under-educated non-workforce is simply a blot on the national balance sheet.

Watch the juvenile wrecking crews on the city streets and weep for all our futures ...

Tel  08 Aug 2011

Economic Democracy    FYB Log    No such thing as society    Riots    Whither Britain? Log

Consumer Culture    Family Breakdown    Inequality, Consumerism & Biodiversity    Marginalised

Trashing Democracy, Society, Environment    They take all our jobs    Victorian Contrasts

Gang suspect killed by police did not fire his gun

Getting into the mindset of a mob mentality

Urban riots: Thirty years after Brixton

Livelihoods destroyed as looters roam streets

Another way to reward the fat-cat directors

Income Inequality: Too Big to Ignore

Inside Britain's New Street Gangs

The Lonely Robot

Missing Out

In the Resolution Foundation's second report to the Commission on Living Standards Matthew Whittaker and Lee Savage explore who is receiving the fruits of growth and who is Missing Out.

Workers in the bottom half of the earnings distribution have seen their fortunes decline significantly in the last thirty years.

Their share of GDP has fallen by a quarter, at the same time as the share going the top 1% of earners increased by half.

Missing Out reveals that in the last 30 years of each £100 of GDP:

• only £12 is paid as wages to the bottom half of earners, down from £16 in 1977

• £14 is paid to the top 10% of earners – more than the whole of the bottom half

• £3 is paid to the top 1% of earners, up from £2 in 1977

Resolution Foundation  25 July 2011    Falling Living Standards    Global Risks 2011    Pawns or Players?

UK household squeeze at its worst for two years

The Commission on Living Standards

Greek bailout boosts global markets

Says it all in five words!

Financial markets have welcomed the long-awaited rescue package for Greece and the strengthening of the eurozone's bailout fund.

The €109bn (£95bn) bailout deal for Greece, which was hammered out at an emergency summit of eurozone leaders in Brussels on Thursday night, sent the euro and shares rallying across Europe on Friday morning.

The value of government debt in crisis-hit Greece, Spain and Italy rose for a second day.

Banking stocks, which have recently been battered by the eurozone debt crisis, were among the top risers, amid relief that a bank levy was off the table, at least for now.

"It is encouraging they have come up with something and dealt with some of the restructuring," said Louise Cooper, markets analyst at BGC Partners.

"The markets have got excited about it. But the cuts to Greek debt do not put the country on a sustainable footing for growth and do not take us where we want to be." ...

Under the 16-point blueprint agreed on Thursday night, the fund will be able to intervene on the secondary markets to buy up the bonds of struggling debtor countries from private investors ...

Gdn  22 July 2011

Greek bailout deal: What the experts say

Richard Murphy

At its core this deal does not work for a number of fundamental reasons. The first is the euro itself cannot work: even with massive fiscal reallocation of wealth within the Eurozone the stress would remain too great: these economies are too disparate to have one currency.

Then there is the fact that, like it or not, Ireland, Portugal, and almost certainly Spain if not Italy, add debts that they cannot support and therefore, like it or not, European banks holding those debts are at a serious threat of insolvency. This deal does nothing to address that issue.

Just as this deal does nothing to really stimulate growth, it recognises that without growth Greece cannot repay its debts and yet the rest of Europe demands cuts in government spending that can only result in a move towards stagnation or recession across Europe as a whole for decades to come.

In other words, this is a fundamentally flawed deal, and the flaw can be simply identified: it is that this deal puts the stability of money above the importance of real economic activity that generates wealth for the people of Europe. This is about bankers, yet again, and not about putting food on the table. This is about preserving wealth and not about creating prosperity. This is about maintaining division, but not about delivering hope.

Gdn  22 July 2011    Bankocracy Log    EU Log    Global Risks 2011    IMF

A Question of Sovereignty

After a Deal, Only More Challenges

Still not enough

Eurozone debt crisis plan: live

Full Statement

Remorseless logic takes Europe closer to fiscal union

European debt crisis

So you thought Britain wasn't corrupt?

... you will find ways in which Britain falls very far short of Scandinavian-level probity; areas where complacency has meant a blind eye is turned to abuses, and grey zones where transactions take place that are not actually illegal, but which would – and should – embarrass one or both parties if they became public.

Several such instances emerged earlier this week when the Commons Home Affairs Committee questioned the Commissioner of the Metropolitan Police ...

The most blatant was Sir Paul's acceptance of hospitality from Champney's health farm.

... the value of this gift – around half the average Briton's annual pre-tax salary – and Sir Paul's apparent inability to understand that accepting it sat uneasily with his position as the country's most senior police officer on a salary of more than £250,000, suggests a blind spot.

It left the impression that there was one law, and one set of subsidised living standards, for the well connected, and another for everyone else.

Something similar applied when it came to the hiring of Neil Wallis, former deputy editor of the News of the World, as a media consultant.

Despite some close questioning … there was precious little clarity about how Wallis actually got the job.

Between the lines, however, it could be deduced that there was no open advertisement, no standard recruitment procedure, no formal interview and no public disclosure of the appointment. This was a public-sector, tax-payer funded position, yet contacts and networks appear to have been all.

What we have here are two of the most deep-rooted maladies of British society: freebies among friends and jobs for the boys ...

... these ingrained ways of doing things are part of the reason why the UK comes below Finland, Australia and Canada in TI's corruption perception index.

They are also a reason, along with our segregated schools, why social mobility in Britain is so relatively poor. Advantage compounds advantage.

Ind  22 July 2011    FYB Log    'Greed is Good' Log    Sociopathy

City watchdog reveals inquiry into collapse of HBOS

City pays £14bn bonuses despite Project Merlin

Banks and other financial companies paid out an unchanged £14bn in bonuses last year despite the Government's Project Merlin deal with the big banks to show restraint on the payouts.

Financial and insurance bonuses made up 40 per cent of the total £35bn paid in UK bonuses in 2010-11, Office for National Statistics figures showed.

The average financial-sector bonus was £12,500, compared with £1,670 for the whole private sector and just £180 for public-sector workers.

The financial-sector total is more than the £12bn paid at the height of the crisis in 2008-09 but below the £19bn at the market peak in 2007-08.

Financial-sector bonuses remained 58 per cent higher than a decade ago and double the total paid out in 2002-03 as the market moved from the dot.com crash to the debt boom.

Bonuses in the financial industry have held up even as the Government has announced public-sector job cuts and ordinary workers in the private sector have seen their living standards eroded by rising prices and static wages ...

Ind  20 July 2011    Coalition Log    Barriers ... Green Economy Log    Bonus Culture    Falling Living Standards    

Graduate gloom as 83 apply for every vacancy

Competition plan for state services unveiled

What a droll little man is Mr Cameron. It seems public services are to blame for inequality!

The reforms would be driven by the principles of choice, decentralisation, diversity, fair access and accountability ...

This would include personal budgets for social care users by 2013;

funding following the user in state schools, universities, childcare and the NHS;

premium payments for school pupils and healthcare patients from disadvantaged backgrounds;

easily accessible information about public service performance;

and payment by results for providers of services such as welfare-to-work, offender rehabilitation, and drug and alcohol treatment ...

[David Cameron] described public services as "the backbone of the country" but complained that they still operate with a "take-what-you're-given" philosophy that has failed sufficiently to close gaps between the life quality of the rich and poor ...

Public services were "failing on fairness", with people in the poorest neighbourhoods dying seven years earlier than those in the richest;

children from disadvantaged families half as likely to get five good GCSE passes as their better-off contemporaries;

and just 40 students on free school meals getting one of the 80,000 places at Oxford or Cambridge universities ...

Ind  11 July 2011

Ministers urged to let schools and hospitals fail to hasten reforms

... documents obtained by the Guardian under the Freedom of Information Act reveal research by civil servants warning that markets are susceptible to "failure" and costs could in fact rise unless a true market is created by allowing public services to collapse if they are unsuccessful.

It opens up the potential for schools, hospitals, social care systems and nurseries to fold without the government stepping in to prop them up ...

The documents obtained by the Guardian were prepared by civil servants as part of an internal government review into the consequences for democratic accountability of the coalition's localism, big society and outsourcing reforms that are integral to today's white paper ...

The document also:

• Concludes there is a benefit in choice and competition in driving up standards, but that it works best where there are fixed prices in health for operations, or in education per pupil, otherwise there is a risk that companies will simply compete by undercutting each other. Drawing on evidence from the first major wave of privatisation in the 1990s, it says "providers will compete on price but quality may suffer".

• Highlights the potential for "market failures" in the public sector, saying some areas may not be appropriate. "In particular, it is worth noting that if the service is complex; time-critical; and used infrequently, (for instance accident and emergency services), it may be difficult for users to make an informed choice."

• It warns that wealthier people may be better placed to exercise choice in which services they access, because they are more likely to be able to travel further for the school or hospital they want ...

Guardian  11 July 2011    'Big Society'    Coalition Log    

Cameron promises to 'end state's monopoly' over public services

John Lewis-style public services to break state monopoly

If you want to get tough on crime, start with inequality

If you want to get tough on crime, start with full employment. And a living minimum wage.

Which might be another way of saying what Ejos Ubiribo is arguing for in this excellent blog.

At a deeper level, the plight of Damilola Taylor's killers stems from the systemic attacks on society - and 'belonging' - which started at least as far back with Henry VIII's reformation - [VV] - and received a massive boost from the impact of Cartesian Dualism.

The 'Fuck You Buddy' dystopia was born, but it grew to 'fulfilment' in the USA, which now exports its ultra violent individualism all over the globe via Hollywood, extreme sports, and the resurrection of torture as an instrument of foreign policy.

A decade after 10-year-old Damilola Taylor was stabbed to death in a stairwell in Peckham, by children not much older than him, serious youth violence is still a grave problem in Britain.

The causes are multifaceted: absent role models at home, fear that masquerades as hyper-patriarchal masculinity, moral decay, inadequate early schooling and high exclusion rates, high unemployment.

But at the root of it is a problem that no government has got to grips with: inequality ...

Reducing the wealth gap in terms of income differentials will see a long-term benefit from increased social mobility, and the prospect of decent jobs and a better quality of life in deprived communities ...

Blue Labour  13 June 2011

A return to Primordial Loyalties    Inequality, Consumerism & Biodiversity

Knife Crime    No such thing as society    Wasted Lives

A hole in the world

Wage study shows rich-poor divide

Wages have been falling sharply in the UK as a share of the national wealth since the mid-1970s, although a "rich minority" have seen their earnings increase, a new study showed.

Workers on low incomes have seen their pay increase by 27% over the past 30 years but wage rises for the top 10% of earners have been four times higher, according to the TUC.

The report found a "sharp divide" in earnings growth between different professions, with medical practitioners enjoying a 153% pay rise since the late 1970s and over 100% for judges, barristers and solicitors ...

Gdn  06 June 2011    Falling Living Standards        

Pay gap is too wide

Executive pay and bonuses

Hutton plan for public sector pay

Targets and Bonuses: John Forbes Nash comes to the Public Sector

[Will Hutton] has proposed an "earn back" scheme for about 2,000 senior staff.

This would put a proportion of their basic pay at risk if they failed to meet pre-arranged performance targets.

But excellent performers who exceeded these targets should be eligible for extra pay.

"No pay system can be fair if it fails to reflect individual performance," Mr Hutton said.

Once implemented at senior level, such a system should be considered on a voluntary basis for middle managers, he concluded.

Other recommendations include:

• abandoning "arbitrary" benchmarks, such as comparisons with the pay of the prime minister
• more opportunities for managers to move across different public services
• executive pay details published in online form ...

Dave Prentis, general secretary of Unison, said:

"The focus on top pay is a missed opportunity. To really boost fairness in the public sector, and our society as a whole, we need to tackle low wages - not just income inequality."

BBC NEWS  15 Mar 2011     Outsourcing

A gap in Will Hutton's pay review

Britain's Secret Fat Cats

Pay plans for public sector chiefs unveiled

Hutton wants brighter spotlight on bosses pay

Dock pay of top civil servants who underperform

Pay cuts for council bosses who don’t do a good job

The Big Society Bail-In brings protest to your local bank

Look through the newspapers this month and two points will become immediately clear.

First, the government is cutting, privatising and changing the very nature of social security and public goods that were won through the 20th century.

Every aspect of what was fought for by generations seems under threat – from selling off the forests, privatising health provision, closing the libraries and swimming pools, and scrapping rural bus routes.

Second, the banks are doing just fine. February is bankers' bonus month; Barclays announces their gifts to themselves on the 15th, with its chief executive, Bob Diamond, expecting £9m just for him.

While RBS is due to transfer its £900m bonus pool into the pockets of high-earning bankers on the 25th. These bonuses should make the disgrace of the MPs' expenses scandal look like chicken feed and are another demonstration of just how much we really are not all in this together.

The two, of course, are linked.

Because it was our broken banking system, with its greed and reckless gambling, that caused the crash.

The National Audit Office has reported that at its peak, the amount of support provided to the banks reached nearly £1tn ...

Guardian  10 Feb 2011

This failure to curb banks is a failure of government itself