The rich - poor gap

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Discussion

AA999

Original Poster:

5,180 posts

223 months

Wednesday 16th April 2014
quotequote all
It seems the issue of the 'rich vs poor gap widening' as reported in the media over the years is getting 'worse'.
The rich seeing an ever increasing income whilst the poor seeing an increasing struggle as they fight against inflation and much lower salary increases (if these occur at all at their job levels).


So what realistic action could be taken to resolve the matter and would it be 'good' for Britain?

A few questions to liven up the discussion :
... Does the gap have to exist in order people work harder and make something of themselves?

... Do the rich have too much control over the UK's wealth, ensuring that even through times of recession they still make every increasing amounts of income?

... If unchecked/uncontrolled what is to stop the rich soaking up 'too much' of the UK wealth leaving the remainder population in 'poverty'?



Edited by AA999 on Wednesday 16th April 15:51

John145

2,466 posts

162 months

Wednesday 16th April 2014
quotequote all
The labour market is saturated. The only real prospect of changing that is to stop unskilled immigration.

Share holders who invest in business do not want this as it reduces their profits.

No share holders results in no investment.

Vicious circle.

So, if we are going to reduce profit margins for share holders what incentive is there? What is it about our country that incentivises share holders when profit is cut?

rovermorris999

5,246 posts

195 months

Wednesday 16th April 2014
quotequote all
'Poverty' should read 'relative poverty' which is why I assume you used quotes. The poor will always be with us as long as it is defined as a percentage of average incomes. There is little or no real poverty in this country by which I mean no food, clothing, housing or healthcare.

AA999

Original Poster:

5,180 posts

223 months

Wednesday 16th April 2014
quotequote all
doogz said:
Where is the line?

I'm curious to know if I'm rich or poor, as it seems you have to be one or the other.
Its a good question.

I don't think I could put a number on income as to when one is deemed poor or whereby one is deemed rich.

I think its fair to say that incomes over £50,000 per year are very much considered rich. But how an individual chooses to spend their 'richness' to provide them with long term wealth is another issue I would have thought.
Maybe its fair to say that incomes lower than £15,000 per year can be considered 'poor'?....after taking off taxes, VATs, food, rent/mortgage etc. there's not much left...in UK terms that is.

Where the media draw the line between those values I do not know.

foreright

1,058 posts

248 months

Wednesday 16th April 2014
quotequote all
AA999 said:
Its a good question.

I don't think I could put a number on income as to when one is deemed poor or whereby one is deemed rich.

I think its fair to say that incomes over £50,000 per year are very much considered rich. But how an individual chooses to spend their 'richness' to provide them with long term wealth is another issue I would have thought.
Maybe its fair to say that incomes lower than £15,000 per year can be considered 'poor'?....after taking off taxes, VATs, food, rent/mortgage etc. there's not much left...in UK terms that is.

Where the media draw the line between those values I do not know.
This depends massively on where you live also - A £50k salary goes an awful lot further in (for example) Norfolk than it does in London.

johnfm

13,668 posts

256 months

Wednesday 16th April 2014
quotequote all
Interesting new treatise by a (left leaning) French economist published recently.

WHile I do not agree with his proposed solutions of very large taxes on wealth, his reasoning is simple enough:

There has developed a large difference between the tax on income and the taxes on capital returns;

if captial returns (ie rent for example) exceed economic growth, the gap between wealth and earnings widens at an accelerated rate.

In a nutshell, income tax is too high, inheritance and capital gains taxes are too low.

AA999

Original Poster:

5,180 posts

223 months

Wednesday 16th April 2014
quotequote all
foreright said:
This depends massively on where you live also - A £50k salary goes an awful lot further in (for example) Norfolk than it does in London.
Yes location is a huge factor, but also, for the rich it would be a choice and for the poor it would be a case of take what you can get.
In that respect can location be considered a like-for-like comparison in terms of 'financial situation'?

anonymous-user

60 months

Wednesday 16th April 2014
quotequote all
johnfm said:
In a nutshell, income tax is too high, inheritance and capital gains taxes are too low.
Occams razor innit. If you want wealth to be more equal, tax wealth instead of income.

Digga

41,125 posts

289 months

Wednesday 16th April 2014
quotequote all
johnfm said:
Interesting new treatise by a (left leaning) French economist published recently.
The French seem busy dissappearing up their own left leaning arses to be capable of rational thought.

Wasn't the latest wheeze to 'ban' work emails (possibly only certain union members I grant you) after 6pm? Up st creek and starting a fire in the canoe using the paddles as kindling.

anonymous-user

60 months

Wednesday 16th April 2014
quotequote all
Digga said:
he French seem busy dissappearing up their own left leaning arses to be capable of rational thought.
LOL

Derek Smith

46,422 posts

254 months

Wednesday 16th April 2014
quotequote all
AA999 said:
Its a good question.

I don't think I could put a number on income as to when one is deemed poor or whereby one is deemed rich.

I think its fair to say that incomes over £50,000 per year are very much considered rich. But how an individual chooses to spend their 'richness' to provide them with long term wealth is another issue I would have thought.
Maybe its fair to say that incomes lower than £15,000 per year can be considered 'poor'?....after taking off taxes, VATs, food, rent/mortgage etc. there's not much left...in UK terms that is.

Where the media draw the line between those values I do not know.
Unscientific I know, but in the 1970s I was a printer and on the union 'committee', looking after the accounts.

The left-wing father of the chapel- shop steward - reckoned that the rich should be taxed more and the rest should benefit from it. His idea of 'rich' was not what many on here would consider.

He had no problems with people earning £100 to £150 a week if they worked hard - he was a real grafter by the way and took pride in his work. This at a time when the wage from printers was around £30pw and the average wage, in London, was a bit over £20. So he was happy for a range of 5-6 times average wage not to be classed as rich.

Average pay nowadays is around £30k, but that's not average for 'workers', so perhaps £25k. So a left-wing socialist was of the opinion that you would not be rich today if you were earning £150k.

His opinions were those of the corporate socialists of the time.

MitchT

16,197 posts

215 months

Wednesday 16th April 2014
quotequote all
John145 said:
The labour market is saturated. The only real prospect of changing that is to stop unskilled immigration.
It's not just that though. Unskilled immigration isn't a threat to skilled workers, yet skilled jobs seem to pay poor wages these days. In my industry you need to be a senior manager to have a wage that's in line with the price of a starter home. It's not so much the rich-poor gap that's the problem as the gap between what an ordinary person gets paid and what it costs to live an ordinary life. I can't work out where the money is coming from to cover these costs and thus perpetuate them.

BenM77

2,835 posts

170 months

Wednesday 16th April 2014
quotequote all


Check some numbers on this budget calculator. If you're on £16000 a year with 2 kids they make your money up to £22500. Take home.

If you have 3 kids that goes up to £25,900.

I would say that people are well looked after in this country.


BenM77

2,835 posts

170 months

Wednesday 16th April 2014
quotequote all
BenM77 said:
Check some numbers on this budget calculator. If you're on £16000 a year with 2 kids they make your money up to £22500. Take home.

If you have 3 kids that goes up to £25,900.

I would say that people are well looked after in this country.
http://m.bbc.co.uk/news/business-17442946

smile

Mr Will

13,719 posts

212 months

Wednesday 16th April 2014
quotequote all
AA999 said:
... Does the gap have to exist in order people work harder and make something of themselves?
The gap does the exact opposite of this.

In an ideal world you have a natural spread of people with different incomes; a few poor, some a little bit tight, lots in the middle, some comfortably off and a few rich - a typical bell curve. When the circumstances for this exist, it makes it easier for someone to make something of themselves and work their way up the scale.

What the gap implies is that there are less and less in that middle section - everyone is becoming polarised towards either the rich or poor end. Jumping all the way across that gap becomes very difficult or impossible.

It's important to note that the gap is the symptom, not the cause. The actual causes are varied and complicated but one example is high house prices and rents - if you are stuck renting it becomes very difficult to ever save up enough for the deposit required to buy which means your cash ends up in the pockets of those who were lucky enough to have the assets to buy in the first place, perpetuating the situation.

Gogoplata

1,272 posts

166 months

Wednesday 16th April 2014
quotequote all
Is it actually a problem though?

MitchT

16,197 posts

215 months

Wednesday 16th April 2014
quotequote all
Mr Will said:
... one example is high house prices and rents - if you are stuck renting it becomes very difficult to ever save up enough for the deposit required to buy which means your cash ends up in the pockets of those who were lucky enough to have the assets to buy in the first place, perpetuating the situation.
Exactly my situation. Meanwhile I pay tax so that people who are theoretically worse off that me can have a roof over their head for nothing. I'm subsidising both those below and above me!

Mr Will

13,719 posts

212 months

Wednesday 16th April 2014
quotequote all
Gogoplata said:
Is it actually a problem though?
I'd say so. It's about social mobility, not wealth redistribution. Remove the incentive to better yourself and you end up with a lower class that either gives up or revolts - neither of which is good for those on top in the long term!

Sonic

4,008 posts

213 months

Wednesday 16th April 2014
quotequote all
MitchT said:
Mr Will said:
... one example is high house prices and rents - if you are stuck renting it becomes very difficult to ever save up enough for the deposit required to buy which means your cash ends up in the pockets of those who were lucky enough to have the assets to buy in the first place, perpetuating the situation.
Exactly my situation. Meanwhile I pay tax so that people who are theoretically worse off that me can have a roof over their head for nothing. I'm subsidising both those below and above me!
Same here, yet i'd be classified by some that have already posted as being "rich".

TTwiggy

11,623 posts

210 months

Wednesday 16th April 2014
quotequote all
MitchT said:
I'm subsidising both those below and above me!
Often at the same time - when your tax pays the rent of someone whose housing benefit is going to a private landlord.