Polly\’s Crackers

Yes, yes, I know, Tim\’s reading The Guardian so you don\’t have to.

OK, management pay is up strongly. Much more so than worker\’s pay.

The bigger question is this: how can Labour ever abolish child poverty if they dare not face down the underlying forces fracturing pay scales all the way through and accelerating the country into ever greater inequality?

Well, actually, there you\’ve got me Polly. The definition you use of child poverty, of poverty in general, is one of relative poverty. OK, but the actual definition is less than 60% of median income. And one of the things about medians (as opposed to means) is that they\’re not affected by what happens at the extremes of the distribution. If the pay of the top 500 CEOs, or the pay of the top 5,000 Great and the Good, goes from, say, £200,000 a year to £2 million a year, the median income in the country hasn\’t actually changed. Thus nor has the 60% of median income.

And thus, unfortunately for your argument, nor has child poverty.

Yesterday the government set up a new child poverty unit: Ed Balls and Peter Hain, the two ministers involved, know their 2010 half-way mark to abolishing child poverty will be missed by miles on its present trajectory. Barnardo\’s are joining in – but their director, Martin Narey, wonders what they can do with no extra money. Only 48p a week extra went to child tax credits this year, subsidising low-paid jobs.

Actually, we can go further. The income tax system is progressive (weakly so, but it is) so when high earners make more this translates into more tax revenue than if low earners were to receive the same sum gross. So, errr, it\’s actually those very runaway wages at the top which are providing the money to pay that 48p a week.

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