Poverty Gap Grows Ever Wider

By Tom May, Weekly Worker, No.82, 16 February 1995

The Rowntree Foundation has confirmed our report in the Weekly Worker, [No.] 80 two weeks ago that the gap between the richest 10% and the poorest 10% has increased from stlg200 to stlg400 since 1979. While the income of those at the bottom has remained stable at about stlg100 per week (1994 prices), the income of the richest 10% has grown between 50% and 60%. The average increase in income overall has been 35%. The contrast is even more marked in the USA, where the bottom 20%—representing millions of working people—are 3% worse off, as opposed to a rise of 35% for the richest 5%.

Although the trend is very clear, there are complications that the rightwing press is playing on. In particular, there seems to be some improvement at the bottom in the number of household durables owned by the poor. In fact,the position of the poorest section of the population has worsened, as social changes now mean that TVs, fridges, even cars, are ESSENTIAL for many workers.

In addition, social services such as health and education are being further tilted against low-income groups. In other words, ABSOLUTE pauperisation has increased.

Howard Davies, the director of the CBI, writing in the Financial Times (Feb 10), comments that the social structure of Britain is leading to the greatest difficulties for the capitalist class and that is why sections of big business are looking to the Labour Party to provide a more rational, stable position.

This increase in differentiation is largely between sections of the working class. It does not show up the huge increases in the very top 2% of society. The ratio of incomes in the UK between the bottom 10% and the top 10% is about 1:5:5, whereas in the USA the ratio is nearer 1:20.

Davies considers the main cause of these changes to be the degree of integration of the world's economy. The only other country that equals this degree of change is New Zealand, itself having adopted essentially the same strategy as the US and the UK of globalising its economy, while stripping the working class of virtually all legal powers for its own self-defence.