According to a new report by the Organisation for Economic Co-operation and Development, there has been a “remarkable” drop in inequality in the UK since 2000. Though Britain is still one of the most unequal societies covered, the report concludes that the “poor” have been getting “richer” in the UK at a rate higher than their counterparts in most of the countries within the organisations remit. Though the semantic confusion involved in describing the “poor” getting “rich” should cause some worry, the point really is to ask how this report can come to such a different conclusion to others, such as Poverty and Wealth Across Britain 1968 to 2005 by the Joseph Rowntree foundation, published last year, which concluded that “Britain is moving back towards levels of inequality in wealth and poverty last seen more than 40 years ago.” One of the foundation’s main points was that that “over the last 15 years, more households have become poor, but fewer are very poor. Even though there was less extreme poverty, the overall number of 'breadline poor' households increased – households where people live below the standard poverty line.” This is important, as it reflects the trend of New Labour’s policies to “tackle” poverty – taking people out of absolute poverty and placing them into working poverty, in low-paid and precarious work which dumps them right back where they started when it dries up (as is looking to happen immanently due to the credit crisis).
That we should be wary with these kinds of reports due to the fact that the same data can lead to different conclusions thanks to how it is presented is well illustrated on page 35 of this document, available through the poverty.org.uk site. Below average incomes are shown to have had the highest proportional increase over the last decade. However, when we look at the distribution of the total increase in income the picture is rather different, with a third of the increase going to the richest 10% of the population, and the vast majority of this increase not going to those who the first graph would tell us are getting “richer”.
But there is another point which is important in all this. If we look at real wages as a share of GDP, a different picture emerges. This report, which compares the findings for real wages using this criteria for European counties shows that what is actually taking place is a higher rate of exploitation, as more of the wealth created is being directed upwards wheras the majority (whose labour produces this wealth) is seeing less of it. By these criteria - ownership of economic growth - remuneration is really stagnating. As David Harvey has argued well in his book, A Brief History of Neoliberalism, this has been the objective of changes in capitalism in the ‘neoliberal’ epoch. That the ideology is looking bankrupt currently does not mean that the reality will shift course any time soon.
What this should remind us is that class division in capitalism is not just an issue of poverty and absolute immiseration, as much as this may still be a terrible reality. It is not just the “poor” who “lose out” in capitalism, but the vast majority of us who have nothing to sell but our ability to work, as by definition we can never see the full product of what we make or do.
Thanks to all who contributed on this thread.
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