Inequality has risen slightly post the global financial crisis, reversing the decreases we saw before that thanks to policies like Working for Families. Since 2009, incomes have been static or falling for people in the poorest half of the country, but increasing for the rich, though without really taking off, as they have done in, say, America.
The Gini coefficient, a standard measure that adds up all the income gaps in a country and in which a high score indicates high inequality, is shown in the graph below. The gentle decline in the early 2000s, and the gentle rise post-2009, are both clear.
Also, don’t forget the real story about inequality, which is very clear from the graph: the huge surge we saw in the 1980s and 1990s, which was the biggest in the developed world, and which has left us far, far more unequal than we were 30 years ago.
On another measure, we can look at how much someone in the richest 10% earned compared to someone in the poorest 10%. The average rich person now earns 7.5 times as much as the average poor person, whereas they used (in the 1980s) to earn 4.5 times as much. That’s a big shift.
That story holds if we look at the figures just for the last few years. Since 2010, the average person in the richest 10% is nearly $10,000 better off. But the average person in the poorest 10%? They are just $200 better off.
Poverty rates remain high – double what they were in the 1980s. Around 18% of the total population (adults and children) were in poverty in both 2009 and 2013. (That’s using the measure that people are in poverty if they have less than 60% of the average income, accounting for household size and housing costs.) That means almost 800,000 people are poor, out of 4.4 million.
For children, the number in poverty (using the same measure) has fallen in the last year, from 285,000 to 260,000, for reasons that are so far unclear.
Regardless, these rates are still far, far higher than a generation ago. The percentage of all people in poverty was 9% in the mid-1980s; now it’s 18%. The percentage of children in poverty was 11% in the mid-1980s; now it’s 24%.