As I\’ve often said

Research shows that, on some measures, the internal inequalities are greater in northern countries such as the UK than in southern countries such as Italy. If one looks at GDP per head for the most affluent region with more than 10% of the population (London, including outer London, in the UK, and Lombardia, including Milan, in Italy), the top to bottom inequality is worse in the UK. In Italy the poorest regions, such as Calabria and Campania, have half the income of top regions, while UK regions such as Merseyside or south Yorkshire, do relatively worse. And 63% of the Italian population attain the mean national GDP or better, compared with 32% in the UK. These inequalities are growing, despite substantial internal transfers, and are driving the rise of a new regional nationalism all over Europe.

The (relatively) high inequality in the UK is at least partly to do with regional inequality, not inequality between individuals per se.

If we were to measure inequality on a regional basis (ie, less than 60% of equivalised household income but using regional medians not national) then a lot of the inequality would melt away.

As would a lot of the inequality if we used regional price levels instead of national ones when measuring consumption inequality.

Another way of putting this is that UK inequality is hugely boosted by London. But does the fact that London incomes are much, much, higher than say in the NE, really indicate anything important or reasonable about inequality? We do, after all, tend to compare ourselves to the Jones\’ next door, not to people who live 400 miles away.

10 thoughts on “As I\’ve often said”

  1. “63% of the Italian population attain the mean national GDP or better”
    (Ignoring the definitional errors and assuming it means “attain incomes equal or greater than average GDP/head”) this would require a very unusual income distribution with either a massive bulge just above the mean and another smaller bulge at minimum income level or a number of massively negative incomes to reduce the mean well below the median.
    Neither is actually the case. If you make up your own statistics and/or pretend that Greek and Italian tax returns are precise and accurate, you can “prove” anything you like.

  2. And, as the Italian taxman has recently been demonstrating, John, the good folk of Lomabardia and the rest of Northern Italy are as keen as anyone else on minimising their tax bills, illegally if necessary.

    Over the Christmas period, the feds visited Cortina, an upmarket ski resort, and took down the registrations of the Ferraris, top end Alfas and so on, and traced them to their owners. And their tax returns. The howls of pain still reverberate.

    A similar exercise was carried out at yacht resorts like Bari and Livorno. Checkpoints on the autostrade focussed again on cars.

    The Taxman claims recoveries running into the billions so far, suggesting substantial income inequality in North Italy, just off the books.

  3. “These inequalities are growing, despite substantial internal transfers, and are driving the rise of a new regional nationalism all over Europe.”

    As I understood it, the relative success of the Lombard League in Northern Italy has arisen because Northern Italians don’t like having their wealth plundered by manana manana southerners.

    If that’s correct, it tends to suggest that disparate wealth (to put it as neutrally as I can) inventivises separatists not from the poorer but from the richer areas (assuming the existence of confiscatory central government taxation in pursuit of “wealth transfers”)

  4. And as an obvious coda to that observation, separatism does not happen in spite of “wealth transfers” but (partly?) because of them.

  5. The usual nonsense from the Grauniad – why on Earth are you (or indeed anyone) reading this stuff? The income inequality data for the UK totally fails to take into account regional cost of living. Even being in the top 20% of wage earners within the UK, I wouldn’t have a snowball’s chance of affording to Live in London or even much of the SouthEast but in the North I’d be quite handsomely off. The Guardian link is deeply disingenuous, even by that publication’s standards!

  6. @ Jeff
    Exactly: I vaguely remembered that but not well enough to trace it to quote, so thanks. Using any data that gets within two alternative universes of reality, the median income in Italy is less than the mean, so less than 50% (let alone 63%) have incomes less than the mean.

  7. john77: eh? 50% have incomes not greater than the median, by definition. So at least 50% have incomes less than the mean, perhaps?

  8. The piece, being written by someone who can’t use grammar correctly, should say “63% of the Italian population live in regions where the mean GDP is greater than or equal to the national mean”.

    The piece, being written by someone who is a fucking dishonest scumbag, should therefore point out that on a regional basis, this means Italy is 2/3 a bit above average and 1/3 really poor – compared to the UK which is 1/3 really rich and 2/3 a bit below average.

    Boringly, the correct interpretation of the data also fits with everything that we knew and expected about both Italy (“the bits near Switzerland build stuff, the bits in the middle are nice enough, the south is dirt-poor”) and the UK (“London is the centre of the global services economy, the rest is a middle-income European country of no great awfulness but no great note”).

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