inequality, the crash and the crisis stewart lansley
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Inequality, the crash and the crisisStewart Lansley
The Inequality U-curve, UK, 1937 – 2009Income share of top 1%
Source: Cost of Inequality, Why Economic Equality is Essential for Recovery
The Falling Wage Share, 1948-2011, UK
Source: The Cost of Inequality: Three Decades of the Super-Rich and the Economy
50
52
54
56
58
60
62
64
66
1948 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 2003 2008
The growing earnings gap, UK
90th percentile
Median
10th percentile
80
100
120
140
160
180
200
220
1978 1983 1988 1993 1998 2003 2008
Source: Cost of Inequality, Why Economic Equality is Essential for Recovery
Rising inequality under Labour, 1997-2010
Share of income held by top 1% and top 0.1%
Share of Employees in Low-wage Work, 2009
Source: OECD (2011) and Mason and Salverda (2010); data for Belgium, France, Italy, Portugal, and Spain refer to 2008; data for France and Netherlands refer 2005
The rising profit share and falling investment, 1948-2010
UK productivity record under ‘managed’ and
‘market’ capitalism
Depth of post-war recessions, UK
-7
-6
-5
-4
-3
-2
-1
0
1956 1957 1961 1973-4 1980-1 1990-1 2008-9
Pe
rce
nta
ge
fall
in o
utp
ut
Source: The Cost of Inequality: Three Decades of the Super-Rich and the Economy
The growing wage-productivity gap, US
Real median wage
Productivity
80
100
120
140
160
180
200
1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006
Re
al w
ag
e-p
rod
uct
ivity
ga
p
Real median wage
Productivity
80
100
120
140
160
180
200
1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006
Re
al w
ag
e-p
rod
uct
ivity
ga
p
Source: The Cost of Inequality: Three Decades of the Super-Rich and the Economy
The growing wage-productivity gap, UK
0
0.5
1
1.5
2
2.5
3
Average, 1980s
Average, 1990s
Average, 2000s
Ann
ual p
erce
ntag
e in
crea
se
Real wage increases
Productivity increases
Source: The Cost of Inequality: Three Decades of the Super-Rich and the Economy
The growth of inequality and debt, US, 1920s
The economic impact of a growing wage/output gap
Demand Bubble economies Regulatory capture
Source: The Cost of Inequality: Three Decades of the Super-Rich and the Economy Source: The Cost of Inequality: Three Decades of the Super-Rich and the Economy
Growth in average wages and labour productivity across rich world, 1990-2011
Source: ILO
Top executive and employee pay, 2000-2011
100
150
200
250
300
350
2000 2002 2004 2006 2008 2010
Top Executives, FTSE 100
All-full time employees
‘Inequality is the defining issue of our time`. President Obama, 2011
‘Excessive inequality is corrosive to growth; it is corrosive to society… the economics profession and the policy community have downplayed inequality for too long.’
Christine Lagarde, January 2013
‘Capitalism may not have it quite so easy in the next phase. Labour will fight back to take its proper (normal) share of the national cake, squeezing profits on a secular basis.’
Albert Edwards, Societe Generale.