Income inequality: the facts
15 March 2015
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Summary:
It is widely believed that income inequality in the UK is rising and will spiral out of control unless action is taken by government. This briefing paper looks at income inequality data from the Office for National Statistics.
The paper shows that there was a rise in inequality in the 1980s, but every standard measure shows no rise since 1990. The top decile (the top 10 per cent of earners) has not raced away from the rest of pack. On the contrary, their share of income has declined slightly since 1990. There is, however, evidence that the top 1 per cent (and the top 0.1 per cent) have increased their share of income, but this has not come at the expense of the bottom 90 per cent: incomes have increased across the board. Despite the recession, average real incomes are twice as high as they were in 1977.
It is widely believed that income inequality in the UK is rising and will spiral out of control unless action is taken by government. This briefing paper looks at income inequality data from the Office for National Statistics.
The paper shows that there was a rise in inequality in the 1980s, but every standard measure shows no rise since 1990. The top decile (the top 10 per cent of earners) has not raced away from the rest of pack. On the contrary, their share of income has declined slightly since 1990. There is, however, evidence that the top 1 per cent (and the top 0.1 per cent) have increased their share of income, but this has not come at the expense of the bottom 90 per cent: incomes have increased across the board. Despite the recession, average real incomes are twice as high as they were in 1977.
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