The FT's piece was titled: Britain and the US are poor societies with some very rich people.
The sub-title suggested that we may soon need to ask migrant labourers to take a pay cut to come and work here. That of course will never happen, but the loss of FoM means it would be far more difficult for British workers to escape poverty by moving to wealthier countries in Europe.
The top-earning 3 per cent of UK households each took home about £84,000 after tax, equivalent to $125,000 after adjusting for price differences between countries, says the FT. This puts our highest earners narrowly behind the wealthiest Germans and Norwegians and comfortably among the global elite. No surprises there. But it's at the bottom where the differences come.
Read this:
"last year the lowest-earning bracket of British households had a standard of living that was 20 per cent weaker than their counterparts in Slovenia."
And this:
"It’s a similar story in the middle. In 2007, the average UK household was 8 per cent worse off than its peers in north-western Europe, but the deficit has since ballooned to a record 20 per cent. On present trends, the average Slovenian household will be better off than its British counterpart by 2024, and the average Polish family will move ahead before the end of the decade. A country in desperate need of migrant labour may soon have to ask new arrivals to take a pay cut."
The USA is worse if anything. The rich across the Atlantic are exceptionally rich — "the top 10 per cent have the highest top-decile disposable incomes in the world, 50 per cent above their British counterparts. But the bottom decile struggle by with a standard of living that is worse than the poorest in 14 European countries including Slovenia."
The article claims that before the pandemic five years of healthy growth in US living standards helped everybody across all percentiles something that didn't happen in the UK.
The piece was particularly interesting because The Treasury under the Truss/Kwarteng partnership is going on a mad dash for growth and one of the ways they intend to do it is by cutting taxes which will favour the rich. Kwarteng is even said to be contemplating lifting the cap on bankers bonuses.
I don't notice a shortage of bankers but I do see farmers and small businesses struggling to recruit workers at the lower end of the scale, partly if not entirely due to Brexit. Making banking more attractive is not going to help. If a City banker isn't satisfied with their pay God help them because they will surely never be happy.
The comparison with Norway is striking. While at the top end - the 97th percentile - rich people in Norway and the UK both have similar disposable incomes between $125-140,000 a year, at the bottom the 5th percentile in Norway earn $27,000 while in the UK they earn just over $16,000, around 68% more. They are well above the average for all developed countries while we are well below it.
Unfortunately, the article doesn't show other EU countries like Germany or France but I suspect we will find they are also far more equal than we are.
I spend years travelling up and down this country from Inverness to Truro and from Anglesey to East Anglia mainly visiting factories of one sort or another and you do notice a lot of very run down areas that you don't see in France or Germany.
Britain is one of the most lightly taxed and regulated economies in Europe and one of the most unequal. Truss aims to cut both tax and regulation even more. There is zero evidence that this will make any difference and plenty that it will make things worse, yet this is the plan.
There is something about the Anglo-Saxon business model which thinks it's OK to become wealthy at the expense of some of the poorest in society. I am not a rabid socialist by any means, far from it, but neither do I believe we can succeed as a nation unless we all benefit equally and everyone can afford the basics of life. At the moment we are headed in the wrong direction.
