A recent study has revealed the eye-watering inequality that exists in Britain, with the mega-rich of the top 0.01% laughing all the way to the bank, whilst the rest of us see attacks on living standards. This is capitalism.
The super-rich in Britain have never been richer. Whilst millions suffer wage cuts and relentless austerity, the top 0.01% have seen a dramatic rise in their fortunes.
According to Mike Brewer and Claudia Samano-Robles at the University of Essex, income inequality is far higher than even portrayed by the government’s own statistics. Whilst the Office for National Statistics have concluded that the income share of the richest has been broadly stable for the past decade, their analysis is blunted by lumping all of the top 1% of earners together.
Rich of the rich
Instead, the new study by the Essex academics drills down deeper into the rich, by looking at the tax records of the 0.01%. The 5,000 or so individuals in this bracket need to take home at least £2.2 million a year, compared to the measly £129,000 needed to get into the top 1%.
They found that whilst the share of national income taken home by the top 1% has increased by 38% between 1995 to 2015, the share of the top 0.01% has increased by a whopping 271%. And even these figures are acknowledged to miss the full picture, due to the difficulty in obtaining honest data.
As is well known, the super-rich employ an army of accountants and lawyers to hide their money from the tax man. The exposure of the Panama papers scandal revealed what everyone already knew but could not prove – that hundreds of billions of pounds are being squirreled away by the world’s wealthiest. And that was only the tip of the iceberg!
Also, capitalism is international. By looking only at UK taxable (and declared) income, this misses the return from investments held by these millionaires all over the world, secreted away in offshore accounts. As much as $32 trillion may be so hidden from view.
Don’t work hard, play hard!
Who are these 5,000 mega earners? Nearly all of them live in London, 9 out of 10 are men, and a third work in ‘financial services’. Yet, according to the report, 15% of the wealthiest do not appear to work at all!
On top of that, we are told that 40% of the income of the top 0.01% is ‘unearned’, i.e. that it came from the returns from financial investments.
Actually, this figure will be far far higher, since presumably this study includes the multi-million pound pay packages of fund managers, bankers, and CEOs, as ‘earnt’ wealth. In reality, these massive pay packets come from the billions of pounds of surplus value produced by the working class, which is expropriated by the capitalists.
So when we’re told that ‘working hard’ is the key to financial success, what is really meant is the financial success of someone else! Whilst millions bust a gut doing gruelling jobs for poverty wages, a handful of parasites take home millions for doing absolutely nothing.
It is often reported that living standards for ordinary people have seen the worst fall since records began. What is not made clear is the flip side of this process – the dramatic rise in fortunes for the super-rich – since the official data ignores those at the very top.
One thing is for sure: with or without the statistics, an enormous backlash is being prepared.