If we want tech growth to create widespread prosperity, we need to shift the rules that determine who reaps the benefits.
Photo by Jack Taylor/Getty Images
As the dust settles on the UK General Election, one of the most important tasks facing the new Government will be healing the clear, and stark, divisions in our society. Chief among these: the vast gap between the super rich and the rest of us — and the resulting huge inequality that’s poisoning our society.
Just the richest 1,000 people in the UK alone, an analysis by the Equality Trust has found, have more wealth than the poorest 40 percent of the population. In fact, last year these rich saw their wealth growth by a barely believable £82.5 billion, the equivalent of £226 million a day, or £2,615 a second.
To put that into context, just one year’s increase in wealth for the richest 1,000 people could pay the energy bills of all 25.6 million UK households for two and a half years. Alternatively, this same increase could pay the grocery bill for all of the UK’s users of food banks for 56 years.
In separate research our Equality Trust has found that the average pay of FTSE 100 CEOs — the UK’s top corporate executives — is running around 190 times what the average employee takes home. These executives now earn 165 times more a year than UK nurses, 140 times more than teachers, and 132 times more than police officers.
As staggering as these statistics are, inequality is even greater in the United States. Readers familiar with the annual Forbes 400 list will know that the land of the free has also become the home of the super rich, with the highest levels of inequality within the developed world. Warren Buffett may be living the “American Dream,” but for countless millions that promise may feel increasingly hollow.
Why does any of this matter? Because inequality harms us all. A wealth of evidence now shows that those in more unequal societies like the UK and US suffer from poorer mental and physical health, worse educational outcomes, and are more likely to be the victims of violent crime. We even have evidence that high inequality can lead to more volatile economies and slower growth.
But it’s not all doom and gloom. Back in the UK, the recent election saw all political parties at pains to stress their commitment to “ordinary people” — whether that be by helping the “just about managing,” representing “the many, not the few,” or committing to “fight for equality, and for a society where nobody is left behind.”
The work of organizations like the Equality Trust has been instrumental in gaining policy concessions from the main parties, not least the Government’s manifesto commitment to require listed companies to publish the ratio of executive pay to broader UK workforce pay. In the United States, meanwhile, organizations like the Institute for Policy Studies continue to play an important role in educating and influencing.
Of course, given the febrile and chaotic political landscape here and across the pond, we face the danger that some of these positive movements will be reversed. This cannot be allowed to happen. With “Brexit” on the horizon, and the inevitable focus that will draw, our Government must not forget its commitment to build a society for all. But for that to happen, the Government must commit to reducing our extreme levels of inequality.