Trends in income distribution
● UK is the fifth most unequal country out of the world’s 27 most powerful economies
FTSE 100 CEOs earned on average 183 times the average pay of a full time employee in
2014 (£5m compared to £27,000)
Weber - class and life chances
Some members of society have better opportunities to achieve things views as desirable;
● The chance to live a long and healthy life
● The chance to receive good qualifications and go onto higher education
● The chance to have a well-paid, fulfilling job and avoid unemployment
● The chance to own your own home in a desirable area
● The chance to go on holidays, enjoy a range of cultural and leisure activities
Weber saw these chances as being closely linked to social class.
Income inequality
The flow of money to a person or household over a time period. Main sources include:
● Earnings from employment
● Benefits
● pensions
● Interest and dividends from savings and investments
Trends in income inequality
● From the 1950s to 70s, income inequality narrowed slightly but during the 1980s they
increased sharply during thatcher, slowed down during the 90s and now is increasing
again
The effects of taxes and benefits on income distribution
● The poorest fifth paid 37.4% of their incomes in tax whereas the richest fifth paid
35.1%
● One explanation for this is the higher proportion of income which is being spent for
low income individuals
Incomes of high earners
● There have been debates about this topic in recent years, with professions like CEOs
receiving large salaries but also bonuses which can be several times their salary
● 2012 high pay centre - ceo of largest 100 companies had increased salaries by 49%
during the past year - 145 times the average pay of their workers
Debates about income inequality
, ● Some would point out that we have all become richer in absolute terms over the last
50 years
● But relatively speaking the poor have gotten poorer and the rich richer due to the
proportion of the increase in incomes
● Functionalist + new right - unequal rewards are beneficial for society as they ensure
those with talents can work hard to showcase their ability. Unless those people have
high salaries, they won’t be able to compete effectively for highly skilled staff in the
global market.
● Marxist + Weber - senior managers and company directors are often in a position to
determine their own salaries, and ordinary workers have to bargain for their rewards
individually or through trade unions and have to accept what others are willing to
offer
Wealth inequality
Wealth is a stock of economic resources and possessions of a person or household at a
fixed point in time. Examples include:
● Property wealth
● Physical wealth e.g. cars, jewellery
● Financial wealth
● Private pension wealth
Problems measuring wealth
● Defining what is counted as wealth is not straightforward
● Calculating the value of assets is difficult
● Obtaining data about wealth is hard - tax evasion
● Distinguishing income from wealth can be difficult
● Many shares in the uk are owned by institutions such as pension funds rather than
private individuals
Distribution of wealth
● More unequally distributed than income
● Poorest 50% have 10% of wealth, poorest 10% have little to no or even negative
wealth (being in debt)
The Birmingham commission report (2013)
● Wealth inequalities occur in different ways - income, inheritance etc
● Wealth affects wellbeing and opportunities
● Low income reduces ability to avoid debt and accumulate savings
● Those on middle incomes still face difficulties e.g. young people struggling to get on
the housing ladder
● Those at the top have seen huge increases in incomes
Link between age and class
● UK is the fifth most unequal country out of the world’s 27 most powerful economies
FTSE 100 CEOs earned on average 183 times the average pay of a full time employee in
2014 (£5m compared to £27,000)
Weber - class and life chances
Some members of society have better opportunities to achieve things views as desirable;
● The chance to live a long and healthy life
● The chance to receive good qualifications and go onto higher education
● The chance to have a well-paid, fulfilling job and avoid unemployment
● The chance to own your own home in a desirable area
● The chance to go on holidays, enjoy a range of cultural and leisure activities
Weber saw these chances as being closely linked to social class.
Income inequality
The flow of money to a person or household over a time period. Main sources include:
● Earnings from employment
● Benefits
● pensions
● Interest and dividends from savings and investments
Trends in income inequality
● From the 1950s to 70s, income inequality narrowed slightly but during the 1980s they
increased sharply during thatcher, slowed down during the 90s and now is increasing
again
The effects of taxes and benefits on income distribution
● The poorest fifth paid 37.4% of their incomes in tax whereas the richest fifth paid
35.1%
● One explanation for this is the higher proportion of income which is being spent for
low income individuals
Incomes of high earners
● There have been debates about this topic in recent years, with professions like CEOs
receiving large salaries but also bonuses which can be several times their salary
● 2012 high pay centre - ceo of largest 100 companies had increased salaries by 49%
during the past year - 145 times the average pay of their workers
Debates about income inequality
, ● Some would point out that we have all become richer in absolute terms over the last
50 years
● But relatively speaking the poor have gotten poorer and the rich richer due to the
proportion of the increase in incomes
● Functionalist + new right - unequal rewards are beneficial for society as they ensure
those with talents can work hard to showcase their ability. Unless those people have
high salaries, they won’t be able to compete effectively for highly skilled staff in the
global market.
● Marxist + Weber - senior managers and company directors are often in a position to
determine their own salaries, and ordinary workers have to bargain for their rewards
individually or through trade unions and have to accept what others are willing to
offer
Wealth inequality
Wealth is a stock of economic resources and possessions of a person or household at a
fixed point in time. Examples include:
● Property wealth
● Physical wealth e.g. cars, jewellery
● Financial wealth
● Private pension wealth
Problems measuring wealth
● Defining what is counted as wealth is not straightforward
● Calculating the value of assets is difficult
● Obtaining data about wealth is hard - tax evasion
● Distinguishing income from wealth can be difficult
● Many shares in the uk are owned by institutions such as pension funds rather than
private individuals
Distribution of wealth
● More unequally distributed than income
● Poorest 50% have 10% of wealth, poorest 10% have little to no or even negative
wealth (being in debt)
The Birmingham commission report (2013)
● Wealth inequalities occur in different ways - income, inheritance etc
● Wealth affects wellbeing and opportunities
● Low income reduces ability to avoid debt and accumulate savings
● Those on middle incomes still face difficulties e.g. young people struggling to get on
the housing ladder
● Those at the top have seen huge increases in incomes
Link between age and class
