inequality

Trickle down economics

Trickle down economics

Trickle down economics is a term used to describe the belief that if high income earners gain an increase in salary, then everyone in the economy will benefit as their increased income and wealth filter through to all sections in society. However others criticise this belief that if the top earners in society gain an increase in income, everyone benefits as a result. Some studies suggest that increased income inequality can lead to this inequality being solidified through educational opportunities, wealth accumulation and the growth of monopoly / monopsony power….

Is the younger generation worse off than their parents?

Is the younger generation worse off than their parents?

Readers Questions: is this the worse time to be a young adult in the UK? I will answer this question primarily from the economic point of view. The first thought that springs to mind is that if you look at the long history of the UK, this is probably a good time to be young in the UK. Median incomes are close to an all time high (even despite the fall since since the 2008 crisis), educational opportunities are arguably better than before (even if more…

Wages Declining as a Share of National Income

Wages Declining as a Share of National Income

The ILO recently produced their growth and wages report for 2012/13. This suggested that across the developing world, labour markets are being characterised by falling real wages and a decline in labour’s share of national income. In particular: Real wage growth has been flat – even negative in the past few years. There is an increasing gap between productivity growth and wage growth. Wages are not rising along with productivity. Wages are becoming a smaller share of national income.  In 16 developed economies, labour took a 75% share of national income in the…

Wealth Inequality in the UK

Wealth Inequality in the UK

New statistics from the ONS, show that there are large disparities in wealth within the UK.  In 2010/12, aggregate total wealth of all private households in Great Britain was £9.5 trillion, (increasing from £9.0 trillion in 2008-10. Some highlights from report The wealthiest 10% of households owned 44% of total aggregate household wealth. The richest 1% have accumulated as much wealth as the poorest 55% of the population The poorest 50% of the population only have 9% of total wealth. Half of all households had total wealth of £218,400 or more. In 2010/12 the wealthiest…