Tag Archives: George Osborne

Take your place in line

5 Oct

In 1971 Dutch economist Jan Pen came up with a brilliant graphical way of conveying the distribution of income in a society. Imagine each person’s height is stretched in proportion to their income. Line them all up in height order with the shortest (poorest) at the front and the richest (tallest) at the back. Now imagine this parade passing by in 1 hour. Where would you be?

Can I share with you some figures from an OU course that uses data from 1995 as an example, bearing in mind that the income gap is accepted to have grown since then?

Rather than individually, people will be parading by in family groups, which means non-earners or low earning partners aren’t counted as destitute. The figures are also adjusted for family size, so based on a couple without children, a single person with the same income would be adjusted upwards since they have more to live on and a couple with children on the same income would be adjusted downwards since they have less to live on.

The average height of 5’8″ is used to represent the average household income.

And so the parade begins.

What’s immediately striking is how tiny almost everyone is, barring the few giants who arrive at the end.

After 3 minutes a single unemployed mum with two small children living below the Income Support level passes by, she is 1’10”.

Six minutes later a single male pensioner who owns his home and claims Income Support passes, he is 2’6″.

Everyone in the first 12 minutes is under 2’10” with household incomes less than half the average.

After 21 minutes a childless couple go by, he works full-time as an exhaust fitter, she does not do paid work, they are 3’9″.

After half an hour the person that passes is only 4’10” with a household income only 83% of the average.

We don’t see anyone who is 5’8″ until 62% of the population have already passed by.

After 45 minutes a couple pass with a baby and a toddler, he is a full-time technician in an engineering firm and she works part-time as a receptionist, they are both 6’10”.

With only 10 minutes left the heights really start to grow.

Fifty one minutes in and a single woman aged 45 with no children passes, she is a full-time personnel officer and is 8’7″ tall.

With only 3 minutes left a couple in their late fifties with grown children pass, he is a freelance journalist and she is a part-time manager of a day centre for the elderly. They are 11’11” high.

In the last minute a company chief executive and his non-earning wife pass, they are at least 60′ tall.

I shall let Pen describe the very last seconds

suddenly: the scene is dominated by colossal figures: people like tower flats… the rear of the parade is brought up by a few participants who are measured in miles… their heads disappear into the clouds

A modest estimate of the income of Britain’s richest man in 1995 would make him and his partner each 4 MILES high.

No-one denies that the earnings gap has increased in the past 15 years.

The average household income in Britain is cruelly distorted by these mile-high behemoths. If even the top 1% were discounted, today’s average income of £20,800 would be considerably reduced.

Which brings me to the magic number.

£44,000

Our household income of £43,000 as an unadjusted figures quite firmly places us in the top earning part of the parade.

Adjusted to take into account one non-earning adult and three children, not so much.

The point of Child Benefit for me is to ensure that I exist. Because, you see, I don’t exist.

As a breeder and a dependant I’m accorded a social status that barely amounts to full citizenship – by which I mean I get to vote.

Child Benefit is the only recorded evidence that I am stepping back from paid employment to be a SAHM. For the years I claim Child Benefit my NI contributions will be topped up to compensate for me taking time out at no cost to the state to raise them. And by no cost I mean ME, my choice not to work costs the state nothing.

The only proof I have of my existence as anything other than a chattel is my Child Benefit.

My two older children are not my partner’s. Their father is a policeman, he earns a good bit less then £40,000 and is married.

Ignoring the rank stupidity of using the personal tax system to determine access to Child Benefit, how do we fit into George Osborne’s new structure?

As a socialist at heart I have no issue with the redistribution of wealth. If MrW and I lose Child Benefit for our child and it results in increased support for families on lower incomes I wholly support that.

What I am not fine with is my ex-husband and I losing child benefit for our children, the two with parents whose income doesn’t amount to the higher tax bracket. It is my ex’s income that determines the maintenance he provides, so surely it’s only fair that his income determines their entitlement to Child Benefit?

Surely?

Linking MrW to Kathryn and Andrew through the personal taxation system will be somewhat of a challenge, and no less expensive than implementing a fair, means tested system.

But the thing that really pisses me off is that lower income families won’t be better off as a result of this. They won’t get more support.

The notion that a family on £18,000 is supporting, through their taxation, the provision of Child Benefit to a family on £50,000 is ludicrous Mr Osborne.

This is an attack on stay at home parents. This is an attack on those of us who wish to avoid institutionalised child-care (been there done that got the t-shirt no thanks).

Forcing parents who can manage adequately on one wage into the job market in this current economic climate is just plain stupid.

If you want fair Mr Osborne, as a non-working, non-claiming adult I want my tax allowance to be transferable to the person I am deemed to be dependant on. MrW. Only then will you have a fair measure of my household income and my decision to raise the next generation of tax payers will be recognised and valued.

Source: Mackintosh & Mooney, Identity, inequality and social class in Woodward (ed), questioning identity: gender, class ethnicity, 2004, The Open University