Gap between rich and poor wider than 40 years ago

Press release issued: 27 January 2010

The independent National Equality Panel, of which the University's Professor Tariq Modood is a member, today publishes a report entitled An Anatomy of Economic Inequality in the UK that calls for policy interventions at each life-cycle stage to counter economic inequalities.

The independent National Equality Panel, in its report entitled An Anatomy of Economic Inequality in the UK, which is published today (27 January), argues that policy interventions are needed at each life-cycle stage to counter the way economic inequalities are reinforced over people’s lives and often on to the next generation.

The Panel, which includes Professor Tariq Modood, director of the University’s Centre for the Study of Ethnicity and Citizenship, finds that:

‘Deep-seated and systematic differences’ remain between social groups across all of the dimensions the Panel examines, although some of the widest gaps have narrowed in the last decade, such as between the earnings of women and men, or in the educational qualifications of different ethnic groups

People’s origins shape their life chances from cradle to grave. Differences in wealth are associated, for instance, with opportunities such as the ability to buy houses in the catchment areas of the best schools, to afford private education, or to help children onto the housing ladder. At the other end of life, wealth levels are associated with stark differences in life expectancy after 50
A tenth of households aged 55-64 have wealth of under £28,000, but a tenth have over £1.3 million (including houses and pension rights). At that age, just before retirement, half of higher professional and managerial household have wealth of over £900,000, but half of households with routine jobs have less than £150,000
Significant differences remain in employment and pay between men and women and between minority ethnic groups and the White British population, despite narrowed or reversed qualification gaps. For instance, women aged up to 44 have better qualifications than men on average, but the middle woman’s hourly pay is 21 per cent below that of the middle man. Only women in the public sector with high qualifications have ‘career progression’ in wages after age 30
Those from nearly every minority ethnic group are less likely to be in paid work than White British men and women. Recent research shows clear evidence of discrimination in who is offered job interviews depending on the apparent ethnicity of applicants’ names shown in CVs
But differences in outcomes between the more and less advantaged within each social group, however the population is classified into groups, are much greater than differences between social groups. Overall inequalities would remain wide even if all differences between groups were removed
Inequality in earnings and in income is high in Britain, both compared with other industrialised countries, and compared with thirty years ago. Over the most recent decade, earnings inequality has narrowed a little and income inequality has stabilised on some measures, but has increased on measures affected by the share going to the very top. The large inequality growth of the 1980s has not been reversed
The Panel identifies sixteen areas – from early years to pensions – where policy interventions are needed to tackle inequalities.

The Panel’s Chair, Professor John Hills, said that:

‘Most people and nearly all political parties subscribe to the ideal of “equality of opportunity”. But advantage and disadvantage reinforce themselves over the life cycle. It is hard to argue that the large and systematic differences in outcomes which we document result from personal choices made against a background of equality of opportunity, however that is defined.’

Professor Tariq Modood added:

'Ethnic minorities are making progress in terms of entry into professional and managerial jobs but not in terms of jobs commensurate with one's qualifications. Moreover, the central problem in relation to racial equality and the labour market – in terms of persistence and scale of inequality – continues to be the unequal levels of unemployment between whites and the minorities.'

Other Bristol academics who contributed to the report include Professor Simon Burgess and colleagues on attainment through school by ethnicity, gender, and free school meals status and by religious affiliation; Dr Liz Washbrook and colleagues on early years attainments; Dr Nabil Khattab on ethno-religious groups and education and occupation; and Sarah Cemlyn on the position of Gypsies and Travellers.

Further information

Further information – including regional findings from the report, a longer summary and the full report – is available from the LSE’s Centre for Analysis of Social Exclusion or by contacting Warwick Smith in the London School of Economics Press Office on 020 7955 7440/7060.
The Panel’s Chair, John Hills, can be contacted at j.hills@lse.ac.uk or via Anna Tamas on 020 7955 6562.
The report will be launched at an event at the British Museum on Wednesday 27 January. Speakers will include the Rt Hon Harriet Harman MP, Minister for Women and Equality; John Hills, Tariq Modood and Teresa Rees (National Equality Panel); Trevor Phillips (Equality and Human Rights Commission); and Ceri Goddard (Fawcett Society)..
The independent National Equality Panel was set up in October 2008 at the invitation of Rt Hon Harriet Harman MP, Minister for Women and Equality. It was asked to investigate how inequalities in people’s economic outcomes – such as earnings, incomes and wealth – are related to their characteristics and circumstances – such as gender, age or ethnicity. Information on the Panel’s terms of reference, activities and commissioned research can be found on its website.
The members of the National Equality Panel are Professor John Hills, London School of Economics (Chair); Mike Brewer, Institute for Fiscal Studies; Professor Stephen Jenkins, University of Essex; Professor Ruth Lister, University of Loughborough; Dr Ruth Lupton, London School of Economics; Professor Stephen Machin, University College London and LSE; Dr Colin Mills, University of Oxford; Professor Tariq Modood, University of Bristol; Professor Teresa Rees, University of Cardiff; and Professor Sheila Riddell, University of Edinburgh.
The economic outcomes covered in the report are educational outcomes (the range of achievement of young people at 16 and adults’ highest educational qualifications), employment status of adults, hourly wages and weekly full-time earnings, individual incomes (received by adults in their own right), ‘equivalent net income’ (based on that of the household, adjusted for its size) and wealth (financial or housing assets and private pension rights).
The report documents differences in these outcomes by gender, age, ethnicity, religion or belief, disability status, sexual orientation, social class, housing tenure, nation or region, and neighbourhood deprivation.
For information on the Government’s response to the report, contact the Press Office of the Government Equalities Office on 020 7276 0988.

Please contact Dara O'Hare for further information.