UK Income distribution

I’ve written before about income inequality in the UK and my main view is that the UK has become more unequal over the last 30 or so years and that this is the source of many of our problems. In case any who read this thinks that I’m proposing socialism, that is not the case. More equal does not mean socialism, it just means “more equal”. I found the following figure on a website called L’Art Social. The figure shows the weekly income since 1961, in 5% bands (i.e., bottom 5%, next 5%, etc) scaled at 2010/2011 prices. It is clear that the biggest growth is at the top, with the top 5% increasing their income by more than a factor of 2 in the last 50 years, while those at the bottom have barely seen a change in income.
1961-2011chart_0

What I thought I would show along with this is the UK’s GDP growth from 1900 – 2000. As far as I can tell there is no correlation with the increased growth in the income of those at the top of the income distribution. The only valid argument that I can see for increasing income inequality is if those at the top are so creative that they drive such strong economic growth that everyone benefits. As far as I can tell, there is no evidence for this. What they are clearly good at is convincing people that this is the case, rather than it actually being the case. I don’t know how to reverse this, but it seems like we should or else we will be compounding the problems facing this country.
GDP_growth_1900-2000

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2 thoughts on “UK Income distribution

    • Thanks. This is actually disposable household income after housing costs. However, whatever measure you consider (90/10 ratio, gini index, household income, individual income) there has been a substantial change in the income distribution in the UK since about 1980 with (as you might guess) the top earners taking an ever increasing fraction of the income.

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