New research published by the High Pay Centre think-tank reveals that even a modest level of wealth redistribution could make a substantial difference to the standard of living for low-earners, and would not be greatly missed by those at the top.
For example, 10 per cent redistributed from those earning £150k+ (about 0.9 per cent of the population) to the bottom 25 per cent would equate to an average 55p per hour pay rise.
Other key findings include:
* The share of national income going to the top one per cent of the income distribution has more than doubled since 1979 to 14.5 per cent from six per cent.
* There are 29,000 people in the UK (the top 0.11 per cent of the income scale) who earn more than £500,000 a year. They already take home £21,500 a month after tax. That is more in a month than someone on an average salary earns in a year (£20,500, after tax). And the government is about to give a tax break worth up to £2.7 billion to the top one per cent when the 50p rate is abolished in April, so take home pay for the rich will become even more disproportionate.
* There are 6.75 million people (the bottom 25 per cent of earners) who take home less than £800 a month. Five million of these are full-time employees.
* Wages for most of the population have stagnated, barely keeping up with inflation.
* If those earning more than £150,000 took a 10 per cent pay cut and it went directly to the bottom 25 per cent, they would get a 55 per hour pay rise to £7.35, taking them closer to the national living wage of £7.45.
* If those earning over £300,000 (the top 0.25 per cent) gave up 10 per cent of their pay, the lowest paid 25 per cent would get a rise of £40 a month.
* These changes would not be fiscally neutral, but would inject some spending power into the economy at the bottom, where it is needed.
The High Pay Centre (http://highpaycentre.org/) report highlights the urgent need for business leaders, bankers and others at the top end of the income scale to engage in the debate about what constitutes a fair reward, and whether existing levels of poverty and inequality are acceptable in an advanced economy such as the UK.
The full report can be downloaded and read here (*.PDF Adobe Acrobat document): http://highpaycentre.org/files/top_to_bottom_FINAL.pdf
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