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Suggested hashtag for Twitter users: #LSEworks Changing Patterns of Inequality in the UK LSE Works: Centre for Analysis of Social Exclusion (CASE) public lecture Bharat Mehta Chair, Chief Executive, Trust for London Professor John Hills Professor, Social Policy Director, Centre for Analysis of Social Exclusion (CASE), LSE Dr Polly Vizard Senior Research Fellow, Centre for Analysis of Social Exclusion (CASE), LSE

Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

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Page 1: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Suggested hashtag for Twitter users: #LSEworks

Changing Patterns of Inequality in the UK

LSE Works: Centre for Analysis of Social Exclusion (CASE) public lecture

Bharat Mehta Chair, Chief Executive, Trust for London

Professor John Hills Professor, Social Policy Director, Centre for Analysis of Social Exclusion (CASE), LSE

Dr Polly Vizard Senior Research Fellow, Centre for Analysis of Social Exclusion (CASE), LSE

Page 2: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Falling Behind, Getting Ahead: The changing structure of

inequality in the UK, 2007-13

John Hills, Jack Cunliffe, Polina Obolenskaya and Eleni

Karagiannaki

LSE Works Seminar 12 March 2015

Page 3: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Inequality 2007-2013 • Update of An Anatomy of Economic Inequality in the UK,

(2010 report of the National Equality Panel) • Changes 2007-2010-2013 for:

– qualifications – employment – hourly wages and – weekly earnings, using LFS; – individual incomes to 2009/10-2011/12; – equivalent net income to 2012/13; – wealth to 2010-12.

• Breakdowns by – gender, – age, – ethnicity, – tenure, – region and – disability status.

• For data: click the chart! Or www.casedata.org.uk

Page 4: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Background: Overall changes in key indicators

• Qualifications up: 25% men and 27% of women of working age with a degree/higher degree by 2013.

• Employment fell 2.3%-points, 2007-2010, then rose 1.2% points by 2013.

• Unemployment rose from 4.1% to 6.0%, then fell to 5.7% by 2013. • Median hourly wages fell 2.8% 2006-08 to 2010 and fell further 3.1%

to 2013. – 90:10 ratio rose by 0.11 to 3.97 (in Labour Force Survey).

• Median FT weekly earnings fell by 8% overall (but by 10% at bottom) • Median BHC net incomes fell 5% 2007/08-2012/13, rose by 1% at

bottom) – price-protected benefits protected bottom • Median AHC net incomes fell 9% over same period, and fell by 6% at

bottom • Median non-pension wealth barely changed (nominal terms), 2006-08

to 2010-12, but grew by 8% at 90th percentile - £38,000 – and by 7% at 10th percentile – but that was only £500.

Page 5: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Gender differences

• Women now better qualified • Men were

– worst hit in employment 2007-2010, but – gained more in the recovery up to 2013

• The gender pay gap is ambiguous – a narrower gap in average (mean) hourly pay for all employees

and for median full-time pay (slightly), but – a wider gap in mid point (median) pay for all employees

• Women’s incomes fell less up to 2012-13, – (as more single women were protected by price-linked benefits

and pensions)

Page 6: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

PAY: Low-paid men and women lose most in real hourly pay

Source: Labour Force Survey

-7.00

-6.62 -5.89

-5.22

-3.67

-10

-8

-6

-4

-2

0

2

10th 30th Median 70th 90th

(a) Men, full-time

2006-08 to 2010 2010 to 20132006-08 to 2013

-8.56 -7.07

-5.73 -5.26 -5.49

-10

-8

-6

-4

-2

0

2

10th 30th Median 70th 90th

(b) Women, full-time

2006-08 to 2010 2010 to 20132006-08 to 2013

Page 7: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

INCOME: Poorest men lose most Changes in AHC income by gender, 2007/8-2012/3 (%)

Source: CASE/DWP analysis of HBAI dataset

-12.2%

-10.2% -10.2% -9.6%

-9.0%

-4.3%

-6.4%

-7.8% -8.1% -9.1%

-14.0%

-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

AHC10 AHC30 AHC50 AHC70 AHC90 AHC10 AHC30 AHC50 AHC70 AHC90

Males Female200708 to 201011 201011 to 201213 200708 to 201213

Page 8: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Differences by ethnicity

• White adults: – had a slower increase in qualifications – smaller proportion now with degrees (except for Bangladeshi

adults) – But White men had amongst smallest increases in

unemployment – And net incomes of White households remain highest before and

after housing costs • Indian and Chinese households

– now have the highest non-pension wealth • Bangladeshi and Pakistani adults

- Are the lowest paid for men - But non-pension wealth was £129,000 for Pakistani households

compared to only £21,000 for Bangladeshi households

Page 9: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Highest qualifications by ethnicity, 2013 (%)

Source: Labour Force Survey

0 20 40 60 80 100

Bangladeshi

White

Pakistani

Mixed/Multiple ethnic groups

Black/African/Caribbean/Black…

Any other Asian background

Other ethnic group

Indian

Chinese

Higher degree Degree Higher Education

GCE A Level or equiv GCSE grades A-C or equiv Level 1 or below

No qualification Don't know

Page 10: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Highest qualifications by ethnicity, 2013 (%)

Source: Labour Force Survey

0 20 40 60 80 100

Bangladeshi

White

Pakistani

Mixed/Multiple ethnic groups

Black/African/Caribbean/Black…

Any other Asian background

Other ethnic group

Indian

Chinese

Higher degree Degree Higher Education

GCE A Level or equiv GCSE grades A-C or equiv Level 1 or below

No qualification Don't know

Page 11: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Widening differences by Housing tenure

• Social tenants – lower qualifications (gap grown) – Lower employment (gap grown) – Men’s earnings (median FT) fell 11% and 9% for women’s

compared to 6-7% or less for other tenures.

• Male social tenants – Unemployment rose twice as much as for owner-occupiers and

private tenants.

• Middle- and high-income private tenants – Incomes (AHC) fell fastest up to 2012/13

• Wealth differences widened,

– Outright owners £307,000 (non pension wealth) – Social and private tenants less than £20,000

Page 12: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Fewer than half of social tenants in paid work Employment status by tenure, 2013 (%)

Source: Labour Force Survey

0 10 20 30 40 50 60 70 80 90 100

Social Housing

Owned outright

Individual privatelandlord

Other

Being bought withmortgage or loan

Employed, FT Employed,PT

Employed not known time

Self Employed Unemployed Inactive (student)

Inactive (family/home) Inactive (disabled) Inactive (retired)

Inactive (other)

Page 13: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Fewer than half of social tenants in paid work Employment status by tenure, 2013 (%)

Source: Labour Force Survey

0 10 20 30 40 50 60 70 80 90 100

Social Housing

Owned outright

Individual privatelandlord

Other

Being bought withmortgage or loan

Employed, FT Employed,PT

Employed not known time

Self Employed Unemployed Inactive (student)

Inactive (family/home) Inactive (disabled) Inactive (retired)

Inactive (other)

Page 14: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Private tenants lost most income Change in median AHC income by tenure, 2007/8-2012/3 (%)

Source: CASE/DWP analysis of HBAI dataset

-9.7%

-2.3% -5.2% -6.7%

-9.2%

-2.2% -6.3%

-13.0% -16.2%

-18.7%

-1.8%

-5.2% -5.7%

-6.4% -10.1%

0.2% -3.4%

-4.8% -4.3%

-3.7%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

AH

C10

AH

C30

AH

C50

AH

C70

AH

C90

BH

C10

BH

C30

BH

C50

BH

C70

BH

C90

BH

C10

BH

C30

BH

C50

BH

C70

BH

C90

BH

C10

BH

C30

BH

C50

BH

C70

BH

C90

Rented fromCouncil/Housing

Association

Rented privately Owned outright Owned with mortgage

200708 to 201011 201011 to 201213 200708 to 201213

Page 15: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Private tenants lost most income Change in median AHC income by tenure, 2007/8-2012/3 (%)

Source: CASE/DWP analysis of HBAI dataset

-9.7%

-2.3% -5.2% -6.7%

-9.2%

-2.2% -6.3%

-13.0% -16.2%

-18.7%

-1.8%

-5.2% -5.7%

-6.4% -10.1%

0.2% -3.4%

-4.8% -4.3%

-3.7%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

AH

C10

AH

C30

AH

C50

AH

C70

AH

C90

BH

C10

BH

C30

BH

C50

BH

C70

BH

C90

BH

C10

BH

C30

BH

C50

BH

C70

BH

C90

BH

C10

BH

C30

BH

C50

BH

C70

BH

C90

Rented fromCouncil/Housing

Association

Rented privately Owned outright Owned with mortgage

200708 to 201011 201011 to 201213 200708 to 201213

Page 16: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Differences by age group

• 20s and 30s better-qualified than any previous generation.

• But their – employment fell faster, – wages fell faster, incomes fell faster and – wealth fell………while it grew for older households.

• Even better-off young people were affected

Page 17: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Big hourly pay hits for 20s and 30s (also teens) Changes in median full-time hourly pay by age, 2006-08 to 2013 (%)

Source: Labour Force Survey, FT employees only

-18.3

-9.9 -13.6

-11.7

-6.1 -4.4 -6.2 -4.3

-0.1 0.3

7.2

15.1

-20.9

-12.7 -15.5

-6.3 -3.1 -1.7 -0.9

-6.6 -2.8 -4.6

9.3

-25

-20

-15

-10

-5

0

5

10

15

20

16-1

920

-24

25-2

930

-34

35-3

940

-44

45-4

950

-54

55-5

960

-64

65-6

970

+16

-19

20-2

425

-29

30-3

435

-39

40-4

445

-49

50-5

455

-59

60-6

465

-69

MEN WOMEN

Page 18: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Big hourly pay hits for 20s and 30s (also teens) Changes in median full-time hourly pay by age, 2006-08 to 2013 (%)

Source: Labour Force Survey, FT employees only

-18.3

-9.9 -13.6

-11.7

-6.1 -4.4 -6.2 -4.3

-0.1 0.3

7.2

15.1

-20.9

-12.7 -15.5

-6.3 -3.1 -1.7 -0.9

-6.6 -2.8 -4.6

9.3

-25

-20

-15

-10

-5

0

5

10

15

20

16-1

920

-24

25-2

930

-34

35-3

940

-44

45-4

950

-54

55-5

960

-64

65-6

970

+16

-19

20-2

425

-29

30-3

435

-39

40-4

445

-49

50-5

455

-59

60-6

465

-69

MEN WOMEN

Page 19: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

….and big drops in weekly earnings Changes in median weekly full-time earnings by age, 2006-08 to 2013 (%)

Source: Labour Force Survey, FT employees only

-20.5

-11.0

-15.3 -13.0

-7.9 -6.5 -6.4

-5.1

-0.7 -1.3

3.6

18.2

-19.7

-12.3

-15.5

-7.8

-2.4 -3.0

1.7

-6.4 -4.4 -3.8

2.2

-25

-20

-15

-10

-5

0

5

10

15

20

16-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70+

16-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70+

MEN WOMEN

2006-08 to 2010 2010-2013 2006-08 to 2013

Page 20: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

….and big drops in weekly earnings Changes in median weekly full-time earnings by age, 2006-08 to 2013 (%)

Source: Labour Force Survey, FT employees only

-20.5

-11.0

-15.3 -13.0

-7.9 -6.5 -6.4

-5.1

-0.7 -1.3

3.6

18.2

-19.7

-12.3

-15.5

-7.8

-2.4 -3.0

1.7

-6.4 -4.4 -3.8

2.2

-25

-20

-15

-10

-5

0

5

10

15

20

16-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70+

16-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70+

MEN WOMEN

2006-08 to 2010 2010-2013 2006-08 to 2013

Page 21: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Worse income drops after housing costs Change in median income after housing costs by age, 2007/8-2012/3 (%)

Source: CASE/DWP analysis of HBAI dataset

-7.9% -6.5%

-4.6%

-15.1%

-19.7% -17.9%

-7.3% -7.6%

-10.9% -11.9% -12.7%

-6.4%

-1.6%

2.6%

-0.2%

-2.5% -2.8%

-25%

-20%

-15%

-10%

-5%

0%

5%

Page 22: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Worse income drops after housing costs Change in median income after housing costs by age, 2007/8-2012/3 (%)

Source: CASE/DWP analysis of HBAI dataset

-7.9% -6.5%

-4.6%

-15.1%

-19.7% -17.9%

-7.3% -7.6%

-10.9% -11.9% -12.7%

-6.4%

-1.6%

2.6%

-0.2%

-2.5% -2.8%

-25%

-20%

-15%

-10%

-5%

0%

5%

Page 23: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Younger people lost wealth – while older people (over 64) gained it

% change in median household non-pension wealth by age group, 2006-08 to 2010-12

-31.7%

-10.1%

-16.9%

-8.8% -5.0%

8.9% 12.5%

15.4%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

16-24 25-34 35-44 45-54 55-64 65-74 75-84 85+

Source: CASE/ONS analysis of Wealth and Assets Survey

Age

Page 24: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

How much did they gain or lose? And how much do they have? (£000s, nominal)

Absolute changes in median non-pension wealth, 2006-08 to 2010-12, and wealth levels in 2010-12 by age

16-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Absolute changes 2006-08 to 2010-12 -3.8 -4.8 -20.6 -16.3 -12.2 19.0 23.1 24.0

Level of non-pension wealth in 2010-12 Median 8.2 42.8 101.5 169.3 232.8 233.5 207.2 180.0 90:10 ratio Na1 61 57 55 48 43 34 32

Source: ONS/CASE analysis of Wealth and Assets Survey. Note: 1. Tenth percentile wealth is minus £6,200 and ninetieth percentile is £61,400

Page 25: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

How much did they gain or lose? And how much do they have? (£000s, nominal)

Absolute changes in median non-pension wealth, 2006-08 to 2010-12, and wealth levels in 2010-12 by age

16-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Absolute changes 2006-08 to 2010-12 -3.8 -4.8 -20.6 -16.3 -12.2 19.0 23.1 24.0

Level of non-pension wealth in 2010-12 Median 8.2 42.8 101.5 169.3 232.8 233.5 207.2 180.0 90:10 ratio Na1 61 57 55 48 43 34 32

Source: ONS/CASE analysis of Wealth and Assets Survey. Note: 1. Tenth percentile wealth is minus £6,200 and ninetieth percentile is £61,400

Page 26: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Conclusions

• The legacy of the crisis has not fallen evenly – far from it • Men were hit harder in the labour market initially than women,

but women lost more after 2010. Women’s net incomes fell less in percentage terms up to 2012-13, as more were receiving benefits and pensions.

• Social tenants fared worst in the labour market, but private tenants had the biggest income drop after allowing for rising rents.

• White adults are now much less well-qualified than other groups but retained their advantage in jobs, pay and incomes. But Indian and Chinese households have higher wealth.

• But striking feature is declining position of young adults compared to predecessors at same age and older adults – with the intergenerational wealth gap wider than ever, making where parents and grandparents are in their (unequal) wealth distributions.

Page 27: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Polly Vizard, Eleni Karagiannaki, Jack Cunliffe, Amanda Fitzgerald, Polina Obolenskaya, Stephanie Thompson, Chris Grollman

and Ruth Lupton

The changing anatomy of economic inequality in London

2007 - 2013

Page 28: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Widespread assumption: London “different” from the rest of the country – story of divergence / London high rates of growth in the 2000s / London more resilient in recession period / with London increasingly “moving away” from the rest

BUT the capital’s economic success and resilience in recession did not translate into lower inequality for Londoners

Economic outcomes for some of the poorest, lowest paid and disadvantaged Londoners deteriorated substantially in the wake of the economic crisis and subsequent downturn

Meanwhile:

Wealth at the top of the distribution increased substantially

Inequality – already higher in London in 2007, further increased against

some indicators

Overall we found that …

Page 29: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Six Main Findings

Page 30: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

1.The poorest Londoners and some disadvantaged groups

were hard hit in the aftermath of crisis and downturn

Page 31: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Percentage change in net weekly equivalised household income after housing costs, London & rest of the UK, 2007/08-2012/13, by percentile point

-19%

-11% -10%

-6%

-8%

-20%

-18%

-16%

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

10th percentile 30th percentile Median 70th percentile 90th percentile

London Rest of UK

Income after housing costs at the 10th percentile fell by 19% in London - a bigger fall than at other points in the distribution, and a bigger fall at the 10th percentile than elsewhere in the country

Source: DWP/CASE analysis of HBAI

Page 32: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Private renters at the 10th percentile were left with only £39 of income after housing costs

£108 £120

£83

£110 £100

£39

£0

£50

£100

£150

£200

£250

Rented fromCouncil/HA

Rentedprivately

Ownedoutright

Owned withmortgage

Rented fromCouncil/HA

Rentedprivately

Ownedoutright

Owned withmortgage

Rest of UK London

Weekly net equivalised income after housing costs, at the 10th percentile, London and the rest of the UK, 2007/08 and 2012/13, by

housing status

2007/08 2012/13

Decreased by £44,

53%

Source: DWP/CASE analysis of HBAI

Page 33: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

For disabled people, the fall in weekly income after housing costs at the 10th percentile in London was more marked

than in rest of the UK*

£139 £141 £117

£100

£0£20£40£60£80

£100£120£140£160£180£200

No LLID LLID No LLID LLID

Rest of UK London

Weekly new equivalised income after housing costs, 10th percentile, by disability status, London & rest of the UK, 2007/08-2012/13

2007/08 2012/13

Decreased by £41, 29%

* discontinuity, interpret with caution

Source: DWP/CASE analysis of HBAI

Page 34: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

2. Unemployment, which was already at a higher base in 2007/8, further increased in London and affected some population groups more than others

Page 35: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Percentage of the working age population classified as unemployed, London and the rest of England, 2007/8 and 2012/13

2007/8 2012/13 Change (Percentage point)

Overall All 5.1 7.0 1.9

Age 16-24 10.0 13.5 3.5

25-30 4.6 7.5 2.9

Disability status* DDA disabled and work-limiting disabled 5.8 8.9 3.1

Ethnicity White British 3.7 5.4 1.8

White and Black Caribbean 10.4 15.3 4.9

White and Black African 10.5 11.2 0.8

Pakistani 7.0 12.2 5.2

Bangladeshi 11.4 11.5 0.2

Black Caribbean 11.5 13.3 1.7

Black African 9.4 13.4 4.0

Other Black 11.3 13.3 1.9

Religion / belief Muslim 9.0 10.0 0.9 Source: CASE analysis of APS/LFS *discontinuity, interpret with caution

Page 36: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

3. The increase in part-time work and self-employment was particularly pronounced in London

Page 37: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

The increases in part-time employment in London were notable in lower skilled jobs

-5.0 -8.8

6.4 5.9

-10-8-6-4-202468

London Rest of England

Change in employment status 2007/08 to 2012/13, by socioeconomic group – London & rest of England (percentage points, significant changes only)

Page 38: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

... And amongst disabled people*, especially women

4.6

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

No LLID LLID No LLID LLID No LLID LLID

Full-time Part-time Self-employed

Change in employment status 2007/08 to 2012/13, women, by disability status, London and the rest of England) - percentage points, significant changes only

London Rest of England

Source: CASE analysis of APS/LFS *discontinuity, interpret with caution

Page 39: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Part-time employment amongst Pakistani and Bangladeshi women also increased in London ....

5.2 5.4

-10.0

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

Whi

te B

ritish

Oth

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Mix

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Indi

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Bang

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/Brit

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Whi

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Indi

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Afric

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/Brit

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Whi

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/Brit

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Full-time Part-time Self-employed

London Rest of England

Change in employment status by ethnicity, 2007/08 to 2012/13, women, London & rest of the country (percentage points, significant changes only)

Page 40: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

4. Weekly earnings and hourly wages fell considerably in London (as in the rest of the country)

Page 41: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Changes in median earnings, wages and incomes in London & rest of England, 2007/08 to 2012/13

-4% -3%

-7% -7% -7% -5% -5% -5%

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

Median FTearnings

Median FTwages

Median PTearnings

Median PTwages

Median incomebefore housing

costs*

Median incomeafter housing

costs*

London Rest of England* Rest of UK

At the median, the falls in part time weekly earnings and part time hourly wages were more marked in London than the rest of the

country

Source: CASE analysis of APS/LFS

Page 42: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

-17% -20-18-16-14-12-10

-8-6-4-202

Overall Men Women Overall Men Women

10th percentile 90th percentile

Change in weekly part-time earnings at the 10th and 90th percentiles, 2007/08 to 2012/13, overall and by gender – London &

rest of England (percentages)

London Rest of England

At the 10th percentile, men experienced a 17% fall in part-time earnings

Source: CASE analysis of APS/LFS

Page 43: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Proportion earning less than London Living Wage increased substantially

Percentage of employees in London with gross hourly wages less than London Living Wage thresholds 2007/08 2012/13

Change (Percentage

point)

Overall All 18.5 22.5 4.0

Gender Men 15.9 18.1 2.2

Women 21.3 27.2 5.9

Age 16-24 46.7 50.0 3.3

Ethnicity

White British 13.8 16.9 3.2

Indian 24.6 25.9 1.3

Pakistani 33.7 43.8 10.1

Bangladeshi 33.1 47.1 14.1

Black/ African/Caribbean/Black British 24.8 30.7 5.9

Disability* DDA disabled and work-limiting disabled 28.2 32.4 4.1

Religion Muslim 34.3 43.6 9.3

Area Outer London 20.1 24.6 4.6

FT / PT Part-time 44.2 49.7 5.5 Source: CASE analysis of APS/LFS *discontinuity, interpret with caution

Page 44: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

5. Wealth

Meanwhile there were colossal increases in absolute (nominal) wealth amongst the top 10% in London

Page 45: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Changes in nominal wealth at the 90th percentile, 2006/08 to 2010/12, London & rest of Great Britain

£192,100 £246,500

£597,100

£749,900

£889,000

£1,088,900

£175,900 £193,000

£479,300 £507,000

£774,700

£895,300

£0

£200,000

£400,000

£600,000

£800,000

£1,000,000

£1,200,000

06/08 10/12 06/08 10/12 06/08 10/12

Financial & physical wealth + property + pension

£ level, nominal

£152,800 (26%)

£199,900 (22%)

£54,400 (28%)

Source: CASE / ONS analysis of WAS

Page 46: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Absolute changes at the 10th percentile were tiny by comparison (£1400 in London)

£3,100

£597,100

£4,500

£749,900

£7,700

£479,300

£8,800

£507,000

£0

£100,000

£200,000

£300,000

£400,000

£500,000

£600,000

£700,000

£800,000

10th % Median 90th % 10th % Median 90th %

2006/08 2010/12

Wealth (financial, physical and property), 10th, 50th and 90th percentile, 2006/08 -2010/12, London & Rest of Great Britain (£ nominal)

London Rest of Great Britain

10th percentile: £1,400 (45%) increase

90th percentile: £152,800 (26%) increase

£27,700 (6%) increase

£1,100 (14%) increase

Source: CASE / ONS analysis of WAS

Page 47: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

6. Inequality was greater in London than the rest of the country - and further increased against some indicators

Page 48: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Summary of 90:10 ratios in London and the rest of the country (2007/8- 2012/13 )

Notes: * Wealth time points are 2006/08 and 2010/12. Wealth measure covers financial, physical and property wealth. FT = full-time; PT = part-time; AHC = after housing costs. Not London = Rest of England for earnings and wages, rest of Great Britain for wealth, rest of UK for income.

Full-time Weekly earnings

Part-time Weekly earnings

Full-time Hourly wages

Part-time Hourly wages

Wealth*

Income before

housing costs

Income after

housing costs

90:10 ratios in 2007/08

London 4.3 7.3 4.3 4.1 192.6 5.7 8.2

Not London 3.8 7.4 3.7 3.5 62.2 4.1 4.9

90:10 ratios in 2012/13

London 4.7 7.4 4.4 4.1 166.6 5.3 9.2

Not London 3.9 7.8 3.8 3.6 57.6 3.7 4.8

Page 49: Changing Patterns of Inequality in the UK · 3/12/2015  · Changing Patterns of Inequality in the UK . LSE Works: Centre for Analysis of Social Exclusion (CASE)public lecture . Bharat

Suggested hashtag for Twitter users: #LSEworks

Changing Patterns of Inequality in the UK

LSE Works: Centre for Analysis of Social Exclusion (CASE) public lecture

Bharat Mehta Chair, Chief Executive, Trust for London

Professor John Hills Professor, Social Policy Director, Centre for Analysis of Social Exclusion (CASE), LSE

Dr Polly Vizard Senior Research Fellow, Centre for Analysis of Social Exclusion (CASE), LSE