Modest redistribution of wealth would give £40 a month boost to lowest paid

A modest redistribution of wealth from the top to the bottom would give a pay rise of £40 a month to the lowest paid 25 per cent of the income scale, according to a new report from the High Pay Centre.

A modest redistribution of wealth from the top to the bottom would give a pay rise of £40 a month to the lowest paid 25 per cent of the income scale, according to a new report from the High Pay Centre.

The share of national income going to the top 1 per cent of the income distribution has more than doubled since 1979 to 14.5 per cent from 6 per cent.

At the same time wages for most of the population have stagnated, barely keeping up with inflation.

And government plans to give a tax break worth up to £2.7 billion to the top 1 per cent when the 50p rate is abolished in April means take home pay for the rich will become even more disproportionate, the report says.

But if those earning more than £150,000 took a 10 per cent pay cut and this went directly to the bottom 25 per cent, they would get a 55 per hour pay rise to £7.35, taking them closer to the national living wage of £7.45.

As well as being fair, this would inject spending power into the economy for those at the bottom, the report says.

Currently taxpayers subsidise low-paying employers to the tune of £4 billion with in-work cash transfers a year, it adds.

Inequality at a glance

. In 1979 the top 0.1 per cent took home 1.3 per cent of the national income; by 2007 this had grown to 6.5 per cent.

. The Gini co-efficient, an internationally recognised measure of inequality, was 0.240 in the UK in 1978, since then it has been increasing and in 2010/2011 it was 0.338.

. Someone on an annual salary of £500,000 takes home more in a month than the average person takes home in a year.

 

Inequality

 

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