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It's wealth inequality, stupid
A fair society will never be within reach unless and until we take action to share wealth more equitably across society
Wealth inequality is at the root of unfairness, for three reasons.
Firstly, its severity. Total net household wealth as a share of national income has roughly doubled in the last thirty years. Wealth inequality is twice as high as income inequality. The richest fifth of the population own 63% of the country’s wealth; the poorest fifth own 0.6%. Men have 40% more wealth than women. White households are four times more likely to have more than £500,000 in wealth than black African households.
Secondly, its causes. Most increases in wealth over recent decades have been ‘passive’ (driven by increases in the asset values of existing wealth) rather than ‘active’ (due to saving or other activities suggesting the application of talent through hard work). Inheritances play an increasingly important role in determining life chances and outcomes.
Thirdly, its consequences. Wealth inequality is a barrier to the achievement of all five of the ‘fair necessities’. It allows poverty to reach unacceptable levels, undermining fair essentials. It leads to educational and job market inequalities, undermining fair opportunities. It undervalues many forms of work, undermining the social contract and fair rewards. If not properly taxed, it weakens public services, undermining fair exchange. It leads to egregious inequalities across class, racial, gender, regional and generational divides across every aspect of our society and economy – from democracy and the environment to housing, health and criminal justice – undermining fair treatment.
For all of the debate about economic growth, there isn’t a shortage of wealth in Britain; if anything, there is a surplus. But it is very unevenly distributed.
Public attitudes to wealth and wealth inequality are nuanced, partly because of widespread admiration for entrepreneurs (and a strong belief in meritocratic ideals), and partly because people think of wealth as a legitimate and necessary aspiration because it is a way of providing security for themselves and their dependents in an insecure world. However, at the same time there is deepening anger about excess wealth - especially if it is not seen as being ‘earned’ or theoretically attainable by anyone who is sufficiently talented and hard working.
We’ll be publishing the results of some recent polling on attitudes to wealth and wealth inequality next week, on Thursday 18 May. We set out to explore two questions. Firstly, how much do attitudes vary based on the source of the wealth, and in particular whether it was earned through work or acquired in other ways (such as inheritance, or rent)? Secondly, what do people think about key fairness questions in relation to people with net wealth of £10 million or more (high net worth individuals)?
To discuss the findings of our polling, and to place it in the context of other research (including the Sunday Times Rich List, which is being published over the weekend of 19-21 May), we’ve assembled an expert panel for an online webinar, from 11:00 to 12:00 on Tuesday 23 May. You can register here.
Next week’s Fair Comment will be published later in the week than usual (as happened this week) - you can expect it on Thursday 18 May - to align with the publication of our report on public attitudes to wealth and wealth inequality.