Myths and bad logic drive obsession with inequality in UK

iea.org.uk

“For too long, the discussion around inequality in the UK has been defined by an array of myths and misconceptions. Contrary to popular belief, income inequality has on most measures been stable for the past quarter of a century, whilst wealth inequality is neither particularly high by historic standards in the UK nor compared with other countries.

Politicians are often too quick to conflate poverty with inequality, either due to a lack of understanding, or in an attempt to score political points, and continual emphasis on the importance of reducing inequality is misplaced. In reality the gap between high and low earners tells us nothing about the material living standards of the poor. In the Chinese growth miracle, inequality increased as everyone got better off. In the UK post-recession, inequality fell as living standards stagnated. Someone too worried about reducing the gap would have to denounce the first, and celebrate the second.

The risk we run by continually focusing the spotlight on inequality levels is that we will lose sight of the main priority: to improve living standards generally, and for the poorest in particular. In order to achieve this, the focus should be to ensure there is healthy economic growth, which in turn leads to higher paying, more productive jobs.

The full briefing, by Ryan Bourne & Christopher Snowdon, can be downloaded here.”

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