Structural inequality, not immigration, is the UK’s problem

[ttosca]

The answer to poverty isn’t to pitch one worker against another of a different nationality; it’s to combat the systems and structures that lead to such inequality

Inequality 2jIn light of the European election results, it is clear that UKIP’s rhetoric has resonated among the public. With more MEPs than any other party and over 27 per cent of the vote, fear about immigration and the harmful effects of EU membership is widespread. UKIP’s popularity, however, means that it’s now more important than ever to scrutinise their rhetoric.

Of course, much has been written about the economic benefits of membership to the EU, and specifically, immigration. Reports have highlighted that migration increases the UK’s GDP, and aids public finances. Yet it’s been claimed that these economic benefits aren’t felt by low-paid workers, a viewpoint that may indeed be valid considering the worrying increase in inequality within the UK over recent decades.

cont'd

www.leftfootforward.org/2014/05/structural-inequality-not-immigration-is-the-uks-problem/

Wrong. Nobody ever died because of relative poverty. People in absolute poverty might starve though. Saying you're poor because you can only afford a Mondeo whilst your neighbour has a Ferrari is idiotic. According to the 'inequality' zealots, poverty fell during the recession...

Unskillied immigration is completely useless to Britain. Let's cut it to zero. Actually, let's get it negative - deport all illegals, without recourse to the courts or appeals, other than to determine whether they are here legally. And let's cut benefits further to make Britain less of a magnet for welfare migrants.

Skilled immigration is extremely useful to Britain. Let's have no caps or quotas for it.

While skilled immigration may be "extremely usefull" to the business elite, this keeps wages low at destination.

By over-saturating the skilled/semi-skiled labout market, coporations and industries have the freedom to pay as little as they can and still complete their workforce.

While no one died from relative poverty, it is this system that is enabling rising capitalism to take a deeper hold on our society.

The article tries to argue that people born in the UK feel that they are more entitled to the benefits of living in one of the strongest ecomomies in the world, and they feel their country is being threatened by immigrants wanting a share of 'their' wealth...

The reality is however, through this process we are not sharing the wealth are we. We are allowing the elite to become increasingly wealthy while eveyone else is increasingly exploited, on a global scale.

I would be all for unlimited immigration if we still had Trade Unions who had any form of power over the business and political elite.

Why cant both be a problem?

So many people do things as either or, when the answer is often both

both of what?

Is this man worth £3 billion 'elite' due to his success in building a business, employing people and paying taxes that support the waste in the Public Sector - what shall we do about him and the others, 'put them up against the wall' and take all their money, that will hardly make a dent in £1,300,000,000,000 of current national debt?

Or accept that many 'poor' people are there because they didn't give a shit at school, and begrudge immigrants for coming in and doing the jobs THEY didn't want to do, often while waiting to win a national talent contest?

'Reverting back to old-fashioned socialism is stupid': JCB boss Lord Bamford warns of Miliband threat

www.dailymail.co.uk/money/markets/article-2642017/Reverting-old-fashioned-socialism-stupid-JCB-boss-Lord-Bamford-warns-Miliband-threat.html

Coming of age, in business terms, at a time when Britain was being held to ransom was a formative experience. Lord Bamford’s nightmare is that history will repeat itself if Ed Miliband’s Labour Party is voted into power next year.

Political uncertainty, he believes, is deterring companies from investing the billions of pounds of cash they have on their balance sheets.

‘What I don’t think politicians understand is that investment decisions in companies are made by very few people. There is a human element and that is confidence. If people don’t have confidence they won’t invest. We are individuals affected by politics and the threat of Miliband getting in must have an effect.’

‘People are thinking, do I make this investment now, or do I wait until after May next year? It must be being asked in boardrooms up and down the country.’

‘I am not scared of Miliband because we are a democracy, but reverting back to old-fashioned socialism is stupid. It won’t work, it never has. Just look at France; just look at the damage that has been done.’

This is the socialist France that in 2012 put up the top rate of tax to 75%, saw many wealthy and 'decision makers' leave, unemployment shot up to a record 11% plus, Pres Hollande then followed the post 2010 UK economic plan, his unemployment is still in the 10%s, ours in the 6%s.

There is no god given right for equality, a much higher Minimum Wage or jobs - but without allowing, never mind encouraging the Private Sector to create jobs, forget the 'rate of pay' when unemployed and receiving benefits, from what Private Sector tax receipts there are to go around i.e. the NHS and education..

Hmm... A lord who inherited his fathers billion pound business doesn't want to capitalism to be effected by socialist measures. Surprise there.

Really?

Isit me or is someone's agenda seriously transparent here.

As transparent as sand, with ones head buried within.

Are you not reading what he says re his understanding of ANY business investment and the medium term clarity it needs to plan ahead, or do you know better using the 1970's and current day France as an example?

He says he is not worried about Miliband, why should he be, he has a mature business that can relocate or reallocate his labour force from the UK to another country he has operations in - even make another country his Head Office if Labour brought in the 50% Corporation Tax they handed the Tories in 1979 that he remembers - but many other businesses cannot so will not invest or contract.

Miliband wants to attack energy prices, but left us with an energy crisis.
www.mumsnet.com/Talk/politics/1983467-UK-Energy-Policy-Price-scandal-outages-due

Miliband wants more home building and better private rental conditions (to make up for Labour's record in the 2000's) , but is threatening to tax the builders and in this case, looking for legislation for controls on private landlords to offer longer term Tenancies.

• but it will make many sell up and kill massive investment for the private sector, to build and rent properties out as more professional landlords that will offer longer fixed terms. “Labour to take on private landlords” www.ft.com/cms/s/0/569d1966-d07c-11e3-9a81-00144feabdc0.html#axzz337DLijKE

The point is, private capital we need as this country is in so much debt will not happen if we anywhere near go back to the 1970's - when most British Manufactures either closed their doors, or was well on the way to.

Yes I read that. I have also read plenty of your other Tory bleatings.

Your solution to the destructive and divisive power of capitalism is more business and more capital.

Structural inequality that sees the worlds top 1% hoarding 50% of all wealth, to you is natural order.

Exactly so.

Now that Piketty's thesis has been destroyed by the FT those of us who know the poor do better when the rich are richer can move into the ascendancy again.

Listen to the R4 interview on Monday.www.bbc.co.uk/programmes/b044gqzb

Pikkety has rebuffed the agenda laden claims made by surprise surprise

ehem excuse me, anyway I look forward to the debate.

Mr Piketty has now published a detailed response to the FT's allegations. Regarding the British data, where the disagreement between Mr Piketty's data and the series calculated by Mr Giles is largest, he writes:

What is troubling about the FT methodological choices is that they use the estimates based upon estate tax statistics for the older decades (until the 1980s), and then they shift to the survey based estimates for the more recent period. This is problematic because we know that in every country wealth surveys tend to underestimate top wealth shares as compared to estimates based upon administrative fiscal data. Therefore such a methodological choice is bound to bias the results in the direction of declining inequality...The gap seems particularly large for the case of Britain, which could reflect the fact that the “wealth and assets survey” seems particularly bad at measuring the top part of the wealth distribution of the UK. Indeed, according to the latest report by the Office of national statistics (ONS), the response rate for this survey was only 64% in 2010-2012; this is an improvement as compared to the response rate of 55% that was observed during the 2006-2008 wave of the same survey (see ONS 2014, Table 7.1); but it is pretty clear that with such a low response rate, it is hard to claim that one can adequately measure wealth inequality, particularly at the top of the distribution. Also note that a 44% wealth share for the top 10% (and a 12.5% wealth share for the top 1%, according to the FT) would mean that Britain is currently one the most egalitarian countries in history in terms of wealth distribution; in particular this would mean that Britain is a lot more equal that Sweden, and in fact a lot more equal than what Sweden as ever been (including in the 1980s). This does not look particularly plausible.

www.economist.com/blogs/freeexchange/2014/05/thomas-pikettys-capital

JaneParker, in addition his theses was not 'destroyed' in the slightest. The FT picked out one section of data that makes no difference to his overall analysis of capitalism, and used this to and make overall (untrue) claims against his entire body of work.

"What's really dishonest is that the small corrections that they make to my series (and with which I disagree) do not make any difference to the overall evolution and to the overall analysis proposed in the book ... and they try to pretend the opposite," he said.

If we wanted to share the wealth with the world today, we should reduce our gdp by a third from around 36k to 12k - effectivly your answer is to make the whole UK significantly poorer

SquidStirFry ….. Re ‘inequality’, I have little confidence in numbers and theories, as they are just that, as they leave out some very basic assumptions, that in reality assume that all the rich have no other option other than be rear-ended by punitive socialist measures in wherever they currently call home AND that capitalism IS key to a sustainable economy and that this funds the Private Sector, welfare and other nice things.

But let me get one thing straight, I don’t mean Labour’s 1997 to 2010 bastardising of capitalism loosening bank regulations to encourage excessive lending, leading to an unbalanced, unsustainable economy, built on the tax receipts of speculation debt, and using that to increase government spending significantly – which was all going to come apart during the first major recession e.g. their 2010 Budget Deficit of £157 billion and accumulating National Debt.
www.theguardian.com/business/2011/dec/12/labour-regulations-city-rbs-collapse

No, I am talking about the replacing of UK Manufacturing that halved under that Labour administration to around 11% of our economy (just above Prostitution & Drugs combined, apparently) and more Business Investment Labour was frightening away, was lacking in confidence thanks to the banking crisis/recession, BUT OVER THE LAST YEAR, has became apparent in the UK, mainly due to Osbornes measures since 2010 to encourage growth/employment.

www.independent.co.uk/news/business/news/million-factory-jobs-lost-under-labour-6150418.html

www.whatinvestment.co.uk/financial-news/markets/2455072/latest-uk-gdp-data-shows-economic-recovery-is-broad-based-and-balanced-henderson.thtml

So lets now take ‘the billionaires’ or just multi millionaires, how many of them living in the UK, skewing our figures, are foreign i.e. Russian, Indian, Chinese, and derive their wealth mainly from outside the UK – and how many of them and those in the UK with businesses/employment could take their wealth elsewhere as the likes of Informa, UBM and WPP To mention a few) did under Brown, but now come back due to Osborne?

How many of these fairly bright people care that they are in some inequality equation that assumes EVERY ONE of those at the multitudes at the lower end of wealth in UK society has done their utmost to take advantage of a free education and available jobs, as tried as hard as every one of those billionaires to risk their own capital to build up businesses and employment?

So practically how do we address THE PROBLEM of low pay to the masses rather than pretend some meaningless ‘inequality’ equation with billionaires, solves anything, rather than just feeding the politics of envy?
blogs.telegraph.co.uk/news/danielhannan/100257586/labour-supporters-admit-it-taxes-are-to-punish-the-rich-not-to-raise-revenue/

Most companies compete on a global basis, how far could wages go up here, that would increase the cost price of the proverbial ‘widget’ and make that ‘widget’ less price competitive, making companies reduce jobs/R&D in a downward spiral, like the 1970’?

How much higher could taxes go, personally and at the business levels and actually bring in more taxes and not reduce Productivity further – bearing in mind, Labour tax hike from 40% to 50% in the last month of a 13-year administration, brought in next to nothing as legal tax planning measures were then used?

Is the answer not for government to be responsible with taxpayers money, keep their costs down, and therefore be able keep taxes low, especially for the lower paid?

www.dailymail.co.uk/news/article-1214001/The-cost-quango-Britain-hits-170bn--seven-fold-rise-Labour-came-power.html

www.telegraph.co.uk/health/healthnews/9356942/Blair-defends-PFI-as-NHS-trusts-face-bankruptcy.html

P.S Re Mr Picketty who influence France’s Pres Hollande’s early 75% taxes to finance fat government, and since had to u-turn, which major economy is currently following his theories, that assumes all the very rich stand footing the bill for fat, inefficient government etc?

Are you able to discuss anything without referring to Labour's alleged past misdeads?

So practically how do we address THE PROBLEM of low pay to the masses rather than pretend some meaningless ‘inequality’ equation with billionaires, solves anything, rather than just feeding the politics of envy?

The politics of greed is what is causing the UK to have one of the highest levels of inequality in europ, and a government which wastes £25 billion on social security reform when social security is a small percentage of the budget and social security fraud is - by their own admission - less than 1%.

Most companies compete on a global basis, how far could wages go up here, that would increase the cost price of the proverbial ‘widget’ and make that ‘widget’ less price competitive, making companies reduce jobs/R&D in a downward spiral, like the 1970’?

Wages could increase considerably. They've stagnated for a couple of decades now. The reason they are not higher is because union power is weak and labour laws are weak.

McDonalds and Walmart are two examples of large international companies which last year made profits in the tens of billions. Yet these companies consistently refuse to pay a living wage. Raising the lowest wages of these companies a few dollars would not threaten the profitability of either company.

In the UK, we have utility companies which record record profits and at the same time consistently raise consumer prices - or fail to reduce costs when the cyclic price of the commodity goes down. This is pure greed.

How much higher could taxes go, personally and at the business levels and actually bring in more taxes and not reduce Productivity further – bearing in mind, Labour tax hike from 40% to 50% in the last month of a 13-year administration, brought in next to nothing as legal tax planning measures were then used?

The poor Capitalist lambs suffering for such high taxes! :(

Actually, the UK has a comparatively low nominal corporate taxation rate compared with the rest of europe, and anyway, many international companies seem to pay little tax in any case because of tax evasion and avoidance.

Germany has a corporate taxation rate almost 10% higher, has one of the lowest levels of wealth inequality, and is also the economic 'powerhouse' of europe.

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All you offer is more neo-liberal bullshit. The same old lies about poor suffering corporations.

You say nothing about the real problems of poverty and inequality in the UK. You offer no solutions. All you offer is more tired and cliched right-wing lies about the economy.

The FT is always pretty left wing in many respects and is very different from the rest of the press. I don't think it has any agenda in looking at what Piketty says. I don't agree his supposedly rebuttal solves the problems of errors in his data at all.

Even if he were right about income differences which he is not that does not matter as as long as the poor are fed it does not matter what other people earn.

If money does not make you happy why does it matter if others have more than you? Surely that just means the person unhappy about it needs to remove the sin of jealousy from themselves to find the route to happiness. Given how many mumsnetters like to earn a low or no income and repeatedly say money does not matter why do they care if someone has more money than they do? Where is their anti materialism then?

The FT is always pretty left wing in many respects and is very different from the rest of the press. I don't think it has any agenda in looking at what Piketty says. I don't agree his supposedly rebuttal solves the problems of errors in his data at all.

The FT isn't left-wing, nor is it right-wing. The editors clearly believe in the goodness of the markets and that the market system will bring the maximum amount of happiness to the most amount of people. They're wrong, of course, but it is a genuinely held belief.

Even if he were right about income differences which he is not that does not matter as as long as the poor are fed it does not matter what other people earn.

Income inequality does matter a great deal, because in a political economy where money buys everything, then wealth buys power and influence. It means that a small percentage of people at the top are detached from the rest of society, and influence government to suit their own needs, while the rest of us suffer for it.

Secondly, the poor are not being fed. That's the problem.

www.independent.co.uk/news/uk/politics/the-real-costoflivingcrisis-five-million-british-children-face-life-of-poverty-thanks-to-welfare-reforms-9442061.html

And these two things are related - huge wealth inequality almost always leads to absolute poverty. It is a fantasy to think that you can live in an oligarchical society where 1% own 50% of the wealth and think that poverty will not be widespread.

The wealth which the 1% collects - or extorts - comes from the wealth produced by the 99%. All those millions of people earning a wage too low to even pay the rent and feed their families are contributing to the riches of the 1%.

That's precisely how the 1% earn their money.

If money does not make you happy why does it matter if others have more than you? Surely that just means the person unhappy about it needs to remove the sin of jealousy from themselves to find the route to happiness. Given how many mumsnetters like to earn a low or no income and repeatedly say money does not matter why do they care if someone has more money than they do? Where is their anti materialism then?

Saying that money won't make you happy is not the same thing as saying that poverty won't make you unhappy. People should be able to earn a fair and living wage for the work which they do - enough to feed their family and participate in leisure and cultural activities.

Secondly, it's a matter of basic fairness. If Walmart pays their employees wages so low that they live in poverty while at the same time make record profits, then employees are being exploited. It's a fundamental issue of fairness.

I think we will need to disagree.
I certainly like the FT because it challenges my libertarian views and it is on of the few papers with a genuinely fairly free editorial line but I accept it takes as its premises our current systems will survive (as indeed they will).

I agree that poverty can make you unhappy which is why I and the lady I linked to above who is speaking about this on Radio 4 tomorrow would argue the aim is to feed the poor. If benefits are wrongly help up and people are hungry I am as much against that as anyone. The benefits levels themselves however are currently enough to let people eat. We hvae one of the most generous systems on the planet.

I think what our parents all told us when we were children tat life isn't fair is wise. It isn't. Some will be miserable however they live because of their genes or upbringing or personality. Others will be beautiful in looks etc etc. We are all different. As long as those at the bottom are fed and housed (I am not advocating having no welfare for people to fall back on) it does not matter if someone earns in an hour what someone else earns in a week of work.

Caroldecker, another capitalist threat: the horror of lowering GDP. For a start, overall GDP in the UK is skewed so drastically because of the wealth gap any change to it only has an impact on a handful on billionaires most of whom don't even live here. There is increasing International concern how GDP growth is for the benefit of the few, and is not an overall benefit. It is also increasingly apparent that GDP does not reflect the wealth of individuals, take housing.

10% of all homes in the UK are owned by a handful of billionaires. (of which approx 1,000,000 are currently left uninhabited). House prices are going up, you can safely say the wealth of these individuals in accelerating faster than everyone else's, while everyone else is left in housing crisis.

These figures are not represented in GDP, only new houses that are built are included. Overall wealth of individuals is not a factor of GDP.

But by the way Carol, when did anyone suggest reducing GDP from 36k to 12k (more than half)?

It would not be logical for a child who has more in her biggy-bank to take more than half of it out and arbitrarily throw it in the air for anyone to scrabble around for for the sake of 'equality' so I am not sure where you got that from...

Isitme, your classic neo-liberal threats that increasing labour wage will push up the price of said widget, plunging all into poverty. Reducing margins never occurs to you.

McDonalds and Walmart refusing to pay living wage spout this tripe "We need to keep our workforce impoverished, or Big Macs will go up in price!" Not true. What about margins??

capitalism's natural opponent is the collective and united voice of the workforce. This voice has been silenced and repressed thanks to sudden globalisation. We exist in an artificial environment designed by the capitalist for the capitalist, this environment is unsustainable.

As Marx predicted and more recently Piketty, we are headed for disaster unless capitalisms natural opponent fights back, either via government (unlikely), or the collective individual.

Longfingernails- there are parts of the UK where the male life expectancy is 54. People are dying of poverty in the UK.

It is true that a lot of poorer communities aren't feeling the benefits of growth/supposed prosperity.

Some housing is still slum like.

There is high unemployment and underemployment hidden behind the figures.

Immigrants have become scapegoats for the wrongs of the rich.

squidstirfry
The OP talked about global inequality - as a country we are amongst the richest nations and the poor here do better than the rich elsewhere. If we want to solve global inequality today, it will invlove use giving away significant portions of our wealth to other nations. If you want to solve global inequality over time, then capitalism is the only proven way of doing this.

Walmart makes about 3% margin, so not much room for cutting it.

caroldecker-

Walmart makes about 3% margin, so not much room for cutting it.

Not true:

Walmart made $17 billion in profit in 2013, and spent $7.6 billion buying back shares of its own stock -- further consolidating the company's ownership in the hands of the Walton heirs, already among the wealthiest people on the face of the earth. As my colleague Catherine Ruestchlin and I explain in our 2013 study, these stock buybacks did nothing to boost Walmart's productivity or bottom line. They contributed zilch to cutting consumer prices or keeping those prices low. But if, for example, funds from this financial maneuvering were redirected to Walmart's low-paid employees, workers would each see a raise of $5.83 an hour. As a result, the overwhelming majority of Walmart workers would no longer need to turn to food stamps to supplement their wages. Other observers have found additional ways the company could substantially boost pay (and reduce reliance on food stamps) without increasing prices. Yet Walmart has made a decision to continue its dependence on food stamps and other public subsidies.

www.huffingtonpost.com/amy-traub/walmart-food-stamps_b_5087262.html

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Walmart: Underpaying the Most People

Walmart employs about 2.1 million workers, two-thirds of them in the United States. Its 2012 revenue is three times that of Apple, and about 15 times that of McDonald's. The company claims its average full-time wage is $12.78 per hour. That's just under $26,000 per year. (IBISWorld says Walmart pays associates $8.81 per hour.)

Based solely on its U.S. business, Walmart makes over $13,000 in pre-tax profits per employee (after paying them), which comes to more than 50 percent of the earnings of a 40-hour-per-week wage earner.

A little-known fact about Walmart that impacts most of us: A study in Wisconsin by the U.S. House Committee on Education and the Workforce determined that a typical Walmart store costs taxpayers over $1.7 million per year, or about $5,815 per employee.

Not mad enough yet? Four members of the Walmart family made a combined $20 billion from their investments last year. Less than half of that would have given every U.S. Walmart worker a $3 an hour raise, enough to end the public subsidy.

www.alternet.org/labor/apple-walmart-mcdonalds-whos-biggest-wage-stiffer