What would the neighbours say? how inequality means the UK is poorer than we think

What would the neighbours say? how inequality means the UK is poorer than we think
Document type
Report
Corporate author(s)
High Pay Centre
Publisher
High Pay Centre
Date of publication
16 June 2014
Subject(s)
Trends: economic, social and technology trends affecting business, People management: all aspects of managing people
Collection
Business and management
Material type
Reports

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This report examines the ‘OECD Better Life Index’ which estimates the average net disposable household income for the world’s richest economies, as well as the average for the poorest and richest 20% of the population in each country. In the UK, the poorest fifth of the population have an average income of just $9,530, much lower than the poorest fifth in other North West European countries such as Germany ($13,381), France ($12,653), Denmark ($12, 183) or the Netherlands ($11,274). In fact, the poorest people in the UK are closer to the poorest in former Eastern bloc countries Slovenia and the Czech Republic than to the poor in Western Europe. This is despite the fact that the OECD estimates average incomes in the UK ($25,828) are similar to Denmark ($25,172) and the Netherlands ($25,697). The UK’s average is inflated by the incomes of the top 20% of the population - at around $54,000, the third highest in the EU. In Belgium, the Netherlands and the Nordic countries, the top 20% make between $44,000 and $49,000. The High Pay Centre analysis also notes that if the UK’s total income of around £1 trillion was divided in the same way as total incomes in Denmark or the Netherlands, 99% of UK households would be better off by around £2,700 per year.

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