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'Growing inequality threatens democracy' | 'Growing inequality threatens democracy' |
(about 5 hours later) | |
Inequalities in pay and opportunities in the UK are becoming so extreme they are threatening democracy, an Institute for Fiscal Studies study has said. | Inequalities in pay and opportunities in the UK are becoming so extreme they are threatening democracy, an Institute for Fiscal Studies study has said. |
The think tank warns of runaway incomes for high earners but rises in "deaths of despair", such as from addiction and suicide, among the poorest. | The think tank warns of runaway incomes for high earners but rises in "deaths of despair", such as from addiction and suicide, among the poorest. |
It warns of risks to "centre-ground" politics from stagnating pay and divides in health and education. | It warns of risks to "centre-ground" politics from stagnating pay and divides in health and education. |
The report says such widening gaps are "making a mockery of democracy". | The report says such widening gaps are "making a mockery of democracy". |
The Institute for Fiscal Studies (IFS), one of the country's leading research institutes, is launching what it says is the UK's biggest analysis of inequality. | |
That will be chaired by Nobel Prize-winning economist Prof Sir Angus Deaton. | |
'Taking rather than making' | 'Taking rather than making' |
He said "people were troubled by inequality" more than at any time since the 1940s - and the impact was so serious that it suggested "democratic capitalism is broken". | |
He warned of the dangers of disillusionment if people did not feel fairly rewarded for their work - and that extreme wealth seemed to be gained by "taking rather than making". | He warned of the dangers of disillusionment if people did not feel fairly rewarded for their work - and that extreme wealth seemed to be gained by "taking rather than making". |
Sir Angus said "people getting rich is a good thing" but not if it meant "enriching the few at the expense of the many". | Sir Angus said "people getting rich is a good thing" but not if it meant "enriching the few at the expense of the many". |
At the outset of this review, the IFS has published indicators of inequality - such as the average chief executive of a FTSE 100 company now earning 145 times the average salary, up from 47 times in 1998. | At the outset of this review, the IFS has published indicators of inequality - such as the average chief executive of a FTSE 100 company now earning 145 times the average salary, up from 47 times in 1998. |
It suggests pay inequality in the UK is high by international standards - with the share of household income going to the richest 1% having tripled in the past three decades. | It suggests pay inequality in the UK is high by international standards - with the share of household income going to the richest 1% having tripled in the past three decades. |
The middle classes are also under pressure, particularly younger generations, with stagnant pay and unaffordable house prices. | The middle classes are also under pressure, particularly younger generations, with stagnant pay and unaffordable house prices. |
The long-term decline in trade union membership is identified as another factor in wages not increasing. | The long-term decline in trade union membership is identified as another factor in wages not increasing. |
As well as inequality in income, the think tank highlights divergence in health. | As well as inequality in income, the think tank highlights divergence in health. |
It says there is almost a 10-year gap in male life expectancy between the richest and poorest areas - and the IFS warns of "deaths of despair", with a rise in early deaths from drug and alcohol abuse and suicide being linked to factors such as poverty, social isolation and mental health problems. | It says there is almost a 10-year gap in male life expectancy between the richest and poorest areas - and the IFS warns of "deaths of despair", with a rise in early deaths from drug and alcohol abuse and suicide being linked to factors such as poverty, social isolation and mental health problems. |
Patterns of relationship are also affected by inequality, the study suggests. | Patterns of relationship are also affected by inequality, the study suggests. |
Over recent decades, wealthier people have become more likely to be living in a couple, either married or co-habiting, the IFS says. | Over recent decades, wealthier people have become more likely to be living in a couple, either married or co-habiting, the IFS says. |
But among the poor, declining numbers are living with a partner, a pattern attributed to increasing job insecurity, a lack of financial independence and more "chaotic lives". | But among the poor, declining numbers are living with a partner, a pattern attributed to increasing job insecurity, a lack of financial independence and more "chaotic lives". |
The big picture, says the IFS, is the UK is becoming more like the US, with a concentration of wealth at the top and pressure on working families lower down the pay scale. | The big picture, says the IFS, is the UK is becoming more like the US, with a concentration of wealth at the top and pressure on working families lower down the pay scale. |
It says that in the US, increases in life expectancy have stalled and that for non-graduate male workers, pay has not risen in real terms for five decades. | It says that in the US, increases in life expectancy have stalled and that for non-graduate male workers, pay has not risen in real terms for five decades. |
"The risk is that the UK may follow a similar path," says the IFS study. | "The risk is that the UK may follow a similar path," says the IFS study. |
The IFS warns of the social tensions that will come with an economic landscape built on widening inequality. | The IFS warns of the social tensions that will come with an economic landscape built on widening inequality. |
As economic think tank the Organisation for Economic Co-operation and Development (OECD) reported recently, this is likely to put pressure on the middle classes as well as those on low incomes. | As economic think tank the Organisation for Economic Co-operation and Development (OECD) reported recently, this is likely to put pressure on the middle classes as well as those on low incomes. |
'Constant lack of security' | 'Constant lack of security' |
University science researcher James Hutchinson, in his 30s, feels he has kept his side of the bargain - gaining a degree from Cambridge - and now working as an academic as well as raising a family with his partner. | University science researcher James Hutchinson, in his 30s, feels he has kept his side of the bargain - gaining a degree from Cambridge - and now working as an academic as well as raising a family with his partner. |
But he feels a sense of "powerlessness" about the cost of housing and that his work has no job security, with a series of short-term contracts. | But he feels a sense of "powerlessness" about the cost of housing and that his work has no job security, with a series of short-term contracts. |
"It's not a sob story," says Dr Hutchinson, "But if people feel they can't improve their lot, then they feel disconnected." | "It's not a sob story," says Dr Hutchinson, "But if people feel they can't improve their lot, then they feel disconnected." |
"We were sold the idea that academic success is the way to be better off," he says. | "We were sold the idea that academic success is the way to be better off," he says. |
He lives in Bristol and struggled to get somewhere they could afford to live - currently the family all sleep in one room while they patch up their home. | |
He recognises that he's "more privileged than many" - earning the average for UK graduates of £35,000 per year - but he voices a frustration at a lack of progress and fears that things could get even worse for his children. | He recognises that he's "more privileged than many" - earning the average for UK graduates of £35,000 per year - but he voices a frustration at a lack of progress and fears that things could get even worse for his children. |
The "disconnect" comes, he says, from his generation becoming "increasingly aware of your own expendability" and a work culture haunted by a "constant lack of security". | The "disconnect" comes, he says, from his generation becoming "increasingly aware of your own expendability" and a work culture haunted by a "constant lack of security". |
Dr Hutchinson is sceptical that any of the political rhetoric will translate into real improvements. | Dr Hutchinson is sceptical that any of the political rhetoric will translate into real improvements. |
"How do we build a functional society out of dysfunctional lives?" he asks. | "How do we build a functional society out of dysfunctional lives?" he asks. |
The problems are even more intense for those further down the line. | The problems are even more intense for those further down the line. |