Ritchie’s chartMarch 2, 2016 Tim WorstallRagging on Ritchie24 Comments Slightly odd as he refers to centiles not deciles. And this is real income, after inflation. Somehow he manages to spin this as policy delivering for the rich only. Remarkable. previousWeird political and economic theory of the daynextYou know they want to say because 24 thoughts on “Ritchie’s chart” Ironman March 2, 2016 at 9:26 am At least he referred to it. There is no chance, no chance at all, of him referring to the increased tax take resulting from lowering the top rate of Income Tax. JonnyA March 2, 2016 at 9:33 am Thought so. I’m in the only negative bit of the graph. Geoff Taylor March 2, 2016 at 9:43 am Being fair, I would hope that nobody refers to the increased tax take. The argument that people deferred income from one year to the next and so distorted the underlying position is a valid one. It’ll be much more interesting to see the next year’s results where that can’t apply. Hopefully on that day we’ll all be cheering loudly and waving “Laffer Roolz” banners. Aaaaa March 2, 2016 at 10:01 am “… assuming of course they did not change centile over the period…” Well, that’s his problem right there. In 14 years pretty much everyone will have changed centile. Except for Richard, who remains firmly in the top cuntile. Surreptitious Evil March 2, 2016 at 10:53 am JonnyA, £25,000-ish in 2014? MyBurningEars March 2, 2016 at 10:54 am “In 14 years pretty much everyone will have changed centile.” Yeah, these decile and centile analyses are not really comparing the life-course of a person. Perhaps better to think of them as showing the evolution of the well-being of people in similar (relative to the UK population) life-stages/life situations. Students, for instance, show up to the left of these charts until they graduate, when the higher-powered ones start to appear much further to the right, particularly after ten years. Surreptitious Evil March 2, 2016 at 11:09 am Hmm, 14 years ago, I had just started working at a bank on £60k basic, about £75k after bonus (being IT rather than one of those actual banker banking types.) Plus my reservist pay (which wasn’t much in those days – less responsibility, many fewer days). So I was a 98%er (2002-3, £76,900 seems reasonable to the much abused neurones). 2013-14, I appear to have been a 99%er, or 1%er if you prefer. Day job paying about as much after tax as it used to be before tax and the back end of £15k (including the bounty) from the Army. JonnyA March 2, 2016 at 11:13 am SE: I’ve averaged across the 14 years by squinting at the graph and sucking my teeth. theProle March 2, 2016 at 11:26 am This would be a much more interesting chart with the post tax income each percentile represented labeled on the lower axis… dearieme March 2, 2016 at 11:31 am I’m a pensioner and cost the NHS a penny or two. I tell myself that what I draw out of the welfare state is some compensation for all that my father paid in. Surreptitious Evil March 2, 2016 at 11:45 am theProle, http://www.surreptitiousevil.com/2016/03/after-tax-centile-figures-201314.html Is that what you wanted? Surreptitious Evil March 2, 2016 at 12:01 pm I’ve added a %age change in after tax income graph too, using the earliest and latest years in the published data (1999-00 and 2013-14). JonnyA March 2, 2016 at 12:14 pm Thanks SE. So in 1999 I was negative and I’m currently at +0.5%. Surreptitious Evil March 2, 2016 at 12:38 pm Jonny, Everybody is +ve and the lowest %age improvement is 52%. Not corrected for inflation, of course. BoE figures state inflation was 50%, 2000-2014. So everybody is +ve. I’ve added a new graph. I really ought to be working … JonnyA March 2, 2016 at 12:53 pm Oh, cool. Thanks for the pay rise, SE. Richard March 2, 2016 at 12:58 pm SE, thank you for that. While you’ve got your spreadsheet fired up, any chance of a graph of 1999-00 post-tax income by centile, to match the 2013 one? Surreptitious Evil March 2, 2016 at 1:23 pm Done (lunch break) Richard March 2, 2016 at 1:42 pm Excellent, thank you SE. Richard March 2, 2016 at 1:48 pm So why is Murphy’s chart different to SE’s? They’re roughly the same at the lower end (60% increase for the bottom centile). They’ve also both got that odd little kink at the end, where 98% is lower than 97% or 99%. But Murphy’s falls more rapidly (and goes lower in the middle, and then rises more steeply and higher at the upper end. It can’t be a different inflation adjustment,because that would bring the whole line up or down. Is Murphy using different source data? Richard March 2, 2016 at 1:50 pm Of course what the whole thing shows is the usual effects of Socialism – the middle & upper-middle lose out, some scraps are thrown to the poor (scraps in terms of overall cost, but a big proportionate benefit to them), and a few at the top benefiting from the system. Surreptitious Evil March 2, 2016 at 2:01 pm Richard, I wondered that myself. But apart from the selection from the published data, the only complexities (and they are really trivialities) in the generation of the images were the %age difference calculations. For the “not taking inflation in to account”, I used “=E3/D3-1” (i.e. 2013-14 divided by 1999-00, minus 1 – to give %age increase.) For “taking inflation in to account”, I merely deducted the 0.5 (i.e. 50%) that represents the inflation figure from the BoE calculator. There is nothing in there even I can cock up. Richard March 2, 2016 at 3:23 pm So I wonder what Murphy has done to get his graph to look like that. Philip Walker March 2, 2016 at 6:35 pm “… assuming of course they did not change centile over the period…” Well, that’s his problem right there. In 14 years pretty much everyone will have changed centile. It must be worse than just “everyone bounces around”, though, for it must be more or less mathematically impossible to have your income rise by 50% or 60% (the average change in the lowest centiles), yet to be in the same centile. You’d have to overtake people in the higher deciles whose incomes have risen by less, proportionately. As MyBurningEars points out, loads of people in those lowest centiles will be students and the temporarily-unemployed-but-too-wealthy-for-the-dole. Give them a year or two and they’ll be in jobs — infinity percent increase in income! Mixed in, of course, will be the real down-and-outs whom people think of when you say “bottom 1% of income” and for whom a few tweaks to tax and benefits are seriously insufficient if their lives are to improve. Philip Walker March 2, 2016 at 6:39 pm Ah, no, I see: this is specifically *not* the change for specified cohorts. So the 50%-60% change is a general raising of the floor on incomes. Forget my first paragraph! It would be interesting to see figures or estimates for cohorts: what happens, distributionally, to the incomes of centiles or deciles in a given year. Leave a Reply Cancel replyYour email address will not be published. Required fields are marked *Comment Name * Email * Website Save my name, email, and website in this browser for the next time I comment.