The Cause of Wealth Inequalities in the UK

Government Policy - Taxation

Progressive Taxation This type of taxation basically means the more you earn the more you pay in tax (it progresses). Income tax is an example of progressive taxation – the higher earners make more of a contribution through taxation. Look at the worked example on textbook Page 13 (UK Social Issues)

Regressive Taxation This works differently to Progressive Taxation in that the more you earn, the less you pay as a proportion of your wage. Therefore, the rich benefit from this. VAT (currently 20%) is a standard rate and doesn’t rise or fall depending on your income so, for example, VAT at 20% on a car costing £10,000 will impact more on the income of someone earning £15,000 compared to someone earning £40,000.

Benefit Policy - Welfare Benefit levels are a political decision and fluctuate depending on who is in power and take into account increases in earnings and the rate of inflation. However, they typically fall below these levels. Critics of the benefit system in the UK claim it tries to camouflage statistics by moving people from unemployment benefit to long- term disability benefits. See Next Slide

Many elderly people are confused by the complicated Welfare System or reluctant to provide details worried that they may end up worse off.

Unemployment The unemployment rate for 16- to 24-year-olds rose sharply in 2009, from 15% in 2008 to 19% in However, the rate had already been rising for a number of years before the recent recession, from 12% in 2004 to 15% in Clearly the recession has had a huge impact on unemployment levels. Overall unemployment levels are around 7% currently. The industries hit hardest by the recession are those typically filled by those in the lower classes eg manufacturing, retail and administration. However, the Government also has an impact on unemployment as they can offer incentives for companies to set up factories. They can also close hospitals and services in one area creating unemployment and spending money in other areas therefore creating employment.

Education See Next Slide There’s clearly a link between qualifications and income.

Age 2/5 of unemployed 50+ workers have been unemployed for more than a year. This has increased by 52% in the last year. Unemployment among 50+ women has increased by 1/3 in the last 3 months.. long-term-unemployment/

Low Pay

Social Exclusion

Who you are Employment rates of disadvantaged groups, UK, Oct-Dec 2009

Gender Just how important is this in terms of income inequalities?

Women More Likely to be Lone Parents The number of people living in lone parent households has quadrupled.

Gender: Lone Parenthood

Fewer Women are in Employment

Gender: Lower Pay

Gender: Part-Time Work

Gender Pay Differences By Region

Job Types The further up the employment sector, the more it’s likely to be dominated by men.

Does Education Help? Why is feamle success at school not reflected in employment and income?

Gender: Longevity Women tend to live longer than men so whilst they are more likely to have a lower income and less wealth than men, they are going to experience this for a longer period of time. Life Expectancy in the UK (2010): Men (78) and Women (82)

Glass Ceiling or Reinforced Concrete Ceiling?

The Glass Ceiling refers to the situation where an individual’s progress within an organisation is halted due to some form of discrimination. This is most commonly related to the lack of progress made by women. ‘Reinforced Concrete Ceiling’ is a reasonably new term that suggests it has become even more difficult for women to push into the hierarchy of significant organisations.

Race

Population Size 7.9% from a minority ethnic group These statistics are taken from the 2001 Census so are no longer accurate.

ETHNIC MINORITIES ARE SET TO MAKE UP A FIFTH OF THE UK POPULATION IN 40 YEARS, A UNIVERSITY OF LEEDS STUDY PREDICTS. IT SAYS THE PROPORTION OF BLACK, ASIAN AND OTHER ETHNIC MINORITIES WILL RISE FROM 8% OF THE POPULATION, AS RECORDED IN THE 2001 CENSUS, TO 20% BY RESEARCHERS SAY THE POPULATION WILL REACH NEARLY 78 MILLION - UP FROM 59 MILLION IN ONE OF THE AUTHORS, PROFESSOR PHILIP REES, SAID THE UK'S ETHNIC MAKE-UP WAS "EVOLVING SIGNIFICANTLY". HE SAID: "GROUPS OUTSIDE THE WHITE BRITISH MAJORITY ARE INCREASING IN SIZE AND SHARE, NOT JUST IN THE AREAS OF INITIAL MIGRATION, BUT THROUGHOUT THE COUNTRY, AND OUR PROJECTIONS SUGGEST THAT THIS TREND IS SET TO CONTINUE THROUGH TO

Economic Migrant

Asylum Seeker

Race: Risk of Poverty Ethnic Minorities are far more likely to live in low-income households than White people.

This is also reflected in terms of the structure of the family unit.

Pakistanis and Bangladeshis are significantly worse off, even compared to other ethnic minority groups.

What factors contribute to this?

Race: Culture Within some groups, it’s quite typical for one parent to work, therefore the household income decreases significantly. Women, culturally, are quite often seen to be more effective as carers than earners.

Race: Education Ethnic minorities tend to live in or around London and certain other pockets of the UK. Inner city living is common. This may have an impact on schooling as the schools they attend are more likely to be lower down the School League Table. However, it could be cultural as some groups do far better than others. Could it be culturally acceptable to fail?

Race: Discrimination Direct - Indirect Institutional Islamophobia

Geography: Where you live There are references to a North/South Divide in terms of health and wealth. Scotland, the North of England, Wales and Northern Ireland, generally speaking having more in common in terms of the above, compared to the South of England. However, there is evidence that the gap may not be as significant as it has been in the past. Whilst, it’s important that you are aware of regional variations in terms of wealth (and later, health) be careful not to generalise. The following demonstrates that within regions and even towns there can be significant differences.

What conclusion(s) can be drawn from this?

Areas that would be considered more ‘working class’ in their characteristics clearly outweigh others.

However, it’s vital that you don’t generalise whole regions in terms of income inequalities because that doesn’t paint an accurate picture. A few hundred metres in distance can make a huge difference. % of working age population in receipt of out of work benefits: Camelon – 28% Larbert – 9.5% Polmont – 6.1% % of 60+ who are in receipt of pension credit: Camelon – 26.2% Larbert % Polmont – 9.8%