Polly Toynbee wants us all to know that inequality is higher than we had assumed. This coming from a Resolution Foundation report claiming that new ways of adding in capital gains onto incomes show that the top 1% – and the top 0.1% – have been getting a larger share of the national income than we had thought. Therefore we’re not all in this together and, obviously, Tories are bastards.
This all rather fails because Polly Toynbee is not capable of understanding numbers. Or complex things like logic but then we knew that.
Here’s her insistence:
When anyone complains of “rising inequality” – because that’s how it feels for so many people – the Tories and their commentariat brandish official statistics showing it’s not so. The dial on the Gini coefficient hasn’t shifted for years, they claim. The Gini coefficient is measured between 0 and 100 – with 0 indicating that income is shared equally among all people and rising to 100 in extreme income inequality. The story was that the rich also took a beating in this long period of austerity imposed by successive Tory governments – and they didn’t get richer.
Now we have proof that this tale isn’t true. Who gains?, a report by the Resolution Foundation released on Thursday, with researchers from the LSE and Warwick University, has found missing billions in earnings of the hyper-rich, all disguised as capital gains – profits from selling an asset for more than it was worth when it was acquired. The share of earnings of the top 1% were far greater and grew far faster than previously disclosed.
This comes from this report.
There being two problems with this. The first is the general cry about inequality. As we know, from the Spirit Level, inequality kills. We’re all murdered in our beds by the fact that someone in Kensington made an extra few million last year. This is proven by the manner in which Pickett and whoever it was charted inequality against the risks of being murdered in our beds. Which is lovely – but if all those inequality statistics are now wrong then so are all the conclusions drawn from a relationship with it.
No, really, the finding that UK inequality is worse than they assumed means that their correlations are all wrong. Which does put the kibosh on a large part of Polly’s argument and worldview.
The second problem is that her claim that this shows a rise in inequality over this past 12 years is incorrect. It actually shows a fall in inequality since the iron fisted rule of the one eyed Viking.
So, here’s the Gini Index as conventionally measured:
As we can see the Gini is, as Polly claims we Bastards claim, a little below what it was under the Brown Terror. Cool. But now Polly wants us all to know that the addition of capital gains changes this. Because the plutocrats have been gaining more in those capital gains so more of us are being murdered in our beds.
From the report:
D’ye see that? The influence of capital gains on income was higher in 2006/7 than it is now. So any new calculation of the Gini – something the report doesn’t actually do – would demonstrate that the Gini, suitably adjusted for capital gains, has fallen since the heady days of the Blair administration in 2006/7. Those Tory Bastards, eh?
And, of course, entirely contrary to what Polly is trying to tell us in her piece today. But then that’s par for the course with Polly and numbers….