A note on British inequality

When you’ve the plumbers knocking on the door of the one percent I’m not entirely sure that social stratification is the thing driving inequality:

Mr Mullins is considering hiring further French plumbers if demand continues to increase, after Mr Hollande’s 75pc levy for France’s highest earners was last month approved by France’s highest court.

“The worse the French economy gets, the better things become for our business,” said Mr Mullins.

He estimates that the new French-speaking recruits could earn between £120,000 and £150,000 a year, in line with his company’s other top engineers.

It might be, rather, that the famed British inequality is in fact geographic inequality rather than class or job based. Further, given that we know very well that the cost of living varies wildly based upon geography then we almost certainly don’t have as much consumption inequality, the only form we should be worried about at all, as people seem to think.

I’m not sure if it is true today but it most certainly was a few years back. That according to ASHE, the highest paid group of women, measured by average hourly wages, were black women. No, we most certainly do not think that black women in general outearn women of other ethnicities. But that is what the figures tell us. The answer being that black women are highly concentrated in London, where wages in general are very much higher than elsewhere.

I am, as I’ve said before, convinced that some to much of the famed British inequality is this inequality of incomes over geographic areas, not inequality of consumption. Essentially, because London dominates Britain in a manner that happens in just about no other European country.

All of which means that the standard techniques to reduce inequality, that predistributionism, the higher taxes, higher minimum wages etc, just aren’t going to address the problem. If, indeed, it’s worth addressing at all. If it really is geographically based then if it is to be dealt with then it would need to be some geographic solution.

8 thoughts on “A note on British inequality”

  1. I suspect that the introduction of the minimum wage has somewhat compressed the London ‘advantage’* at the lower wage levels. In fact, it would be rather interesting to see exactly what impact that has had.

    On the basis that few bar the smallest employers will actually be calculating employment opportunity** on a single-person level, as opposed to “do we have enough business for another shift / team”. If the minimum wage has significantly compressed the differentials for the first and even second level supervisors (anecdotally, from the daughter who is in that sort of position, it has), then the “next team” may not be as badly effected by LMW than the “next spanner-monkey”. Just supposition.

    * In numbers if certainly not in PPP.

    ** As opposed to employability – but, again, it is the larger employers with HR departments making it difficult to get rid of under-performers.

  2. I must say, having worked on a few French houses, the news the French have plumbers is coming as a bit of a revelation. Thought the last one died somewhere in the 1920’s.

  3. Me too, BIS
    Had two sets of plumbers, one for sanitation, one for heating. Both managed to go bust in the middle of a property boom.

  4. up to a point. If I am earning £100,000 in London and £30,000 in Bristol, whilst some consumption goods are slightly cheaper, the big difference is housing. But if I am paying off a mortgage, I am buying an asset, so higher London house prices do not make me worse off in the same sense that higher London beer prices do.

  5. And of course bollocks from the DT.
    Plumbers are past masters at arriving with the wrong kit. It’s how you can bill two sets of hours while you allegedly go to the shop to get the part.
    French exiles in South Ken are unlikely to be monoglot. Maybe they don’t have all the plumbing jargon. So if Pimlico Plumbers are serious they only need to have a French speaker on the phone to hear the problem. 99% of the time you can diagnose a plumbing fault over the phone, after that any monkey can fix it. And for a lot less than £120,000 per year.

  6. Luis – fair point but for many people it’s the other way round, they leave London to get a mortgage… if mortgages are more common among young professionals in Bristol, and rent in London, that makes the inequality worse doesn’t it?

    (What happens if the value of a London asset is only realised upon death? During life that still works out as very expensive housing consumption, with only the bricks and mortar to show for it. Same warmth and comfort as a cheaper shack out west. After, the kids do nicely out of the deal. Or perhaps as likely, the care home provider. So in terms of inequality, what’s going on? Seems as much generational as geographic.)

  7. If you can accumulate savings or other forms of capital (housing) from the higher earnings in London (that’s only really applicable to the middle class, not the working class) then you can move away from London and spend that money.

    If you buy a house in London, then sell when you retire and move somewhere cheaper, you can end up with a large wodge in the bank to enjoy your retirement.

    Even if you can’t afford a mortgage in London, your pension and other savings are still likely to be nominally higher than they would be elsewhere in the country, and will enable you to spend more if you retire away from the city.

    Finally, of course, things that cost the same wherever you are (e.g. cars, internet goods) and also holidays (which, usually, cost more or less the same wherever you travel from) will be more affordable in London.

    So – I predict, Londoners will be more able to afford Sky and Netflix, will have nicer cars and better holidays.

    That’s not a nullity – but it’s not the same as food, housing, beer, and so on.

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