2_Causes of Inequality - eduBuzz.org Learning Network

Study Theme 2: Wealth and Health in the UK
Learning Intentions
• Be able to explain what social class is and how it is measured
• Be able to draw a conclusion about the increasing or
decreasing levels of poverty
Be able to explain how wealth is measured and give examples
Be able to give specific explanations and examples that show
what causes poverty
Give evidence to demonstrate wealth distribution in Scotland
Start to think about the impact of wealth inequality
CONNECT: List –O-Mania
List as many...
Facts about poverty in the UK as you can.
Despite the establishment of the Welfare
State in the UK there is evidence of
continuing inequalities in health and
wealth. Before we investigate this fact we
need to understand what social class is
and how it is measured.
The Registrar-General's Model of Social Class
A Professional occupations
university teacher
B Intermediate occupations
Pilot, farmer, manager, police officer,
C1 Non-manual skilled occupations
Clerical, sales representative, shop
assistant, secretary
C2 Manual skilled occupations
Butcher, bus driver, electrician, miner
D Partly skilled occupations
Bus conductor, bar person, postal
E Unskilled Occupations
Middle Class
Lower Class
This method divides the population by occupation however, it misses out large sections of the population.
Can you spot which groups are missing?
The Hope-Goldthorpe Scale
1 Higher grade professional
Company director, senior manager
Service Class
or Manager in a small business, higher
level supervisor
3 Routine non-manual
Clerical, sales
4 Small proprietor/self employed
Small farmer, electrician, plumber
5 Lower grade technician or supervisor
Lower level
6 Skilled manual
Electrician or butcher
Intermediate Class
Lower Class
7 Semi-skilled manual
Farm labourer
This method uses occupation to measure class but also tries to take into consideration management responsibilities.
How are these two methods of
measurement different?
Which do you think is more accurate?
Measuring wealth:
The term wealth can be used to describe the situation of an
individual or a country. Individual wealth is a monetary
measure of the assets a person owns, such as; property,
savings or pension rights. In the UK there is considerable
inequality in individual wealth.
• Male: 90%
• Middle-aged: 80%
• Live in London/SE: 70%
• Work in finance, property, accountancy, law: 60%
• Average income: £785,000
The Richest Person in Britain
The most affluent family in
Britain, headed by Major
General Gerald Grosvenor,
owns 77 hectares (190 acres)
of prime real estate in
Belgravia, London, and has
been a beneficiary of the
foreign money flooding in to
the capital's soaring property
market in recent years.
Oxfam said Grosvenor and
his family had more wealth
(£7.9bn) than the poorest
10% of the UK population
The top 1 per cent – made up of
25,000 people earning more than
£120,000 a year – are estimated to
earn a tenth of all income in Scotland,
and 20 times more than those in the
bottom 1 per cent, according to a
study published today.
Draw and label and caricature to
demonstrate who the VERY rich are.
Inequality Video
• New poverty and wealth maps of Britain reveal inequality to be
at 40-year high.
• Households in already-wealthy areas have tended to become
disproportionately wealthier and that many rich people live in
areas segregated from the rest of society.
• At the same time, more households have become poor over
the last 15 years, but fewer are very poor.
• Danny Dorling, who led the research, said: “Most interesting
and certainly unexpected when this work began is the
geography of those households who are neither rich nor poor.
Over time it has become clear that there is less and less room
in the south for them; they have either moved elsewhere, or
become poor.”
Poverty Maps
"Since 2003 the majority of the
British public (95%) have seen a
12% real terms drop in their
disposable income after housing
costs, while the richest 5% of the
population have seen their
disposable income increase."
What do the poverty maps demonstrate
about wealth in Britain?
JRF - Orton and Rowlingson
• Over the last 20 years, a large majority of people have
considered the gap between high and low incomes too large.
• However, people are more likely to think that those on higher
incomes are overpaid, than to believe that those on low
incomes are underpaid.
• While the public believe economic inequality is a problem,
there is no clear agreement about how this problem should be
What conclusions can you draw about
inequality from this article?
What does the public agree on?
Why does the government find it difficult to
deal with this problem?
Where we are…
• We have looked at evidence of wealth inequality in the UK
• We have looked at where this wealth inequality is
Where we are going . . .
• We need to look at causes of wealth inequality
• We need to look at attempts to reduce wealth inequality
• We need to assess the success of these attempts
• And look at the impact of continuing wealth inequality
*Government Policy
*North/South Divide
Government Policy:
This section is large and is divided into sections –
• Economic Policy
• Taxation Policy
• Employment Law
• Benefits Policy
Economic Policies
• The government can take actions to stimulate the economy in
order to reduce unemployment and reduce poverty or they
can make decisions which will increase them.
economic policies will also lead to changes in interest rates
and this will make lending from banks and building societies
more expensive or less expensive which will then increase or
reduce poverty.
• The coalition government’s focus has been on austerity and
reducing the national debt which they believed would restore
confidence of the business sector and stimulate the economy.
• National Minimum wage £7.45 per hour.
Taxation Policy
• Personal allowance has been increased to £10,000. From this April
2014, workers will see a small increase in their take home pay as a
result of changes to personal allowances, although it will be unlikely
to be enough to make up for the increases in household bills.
• A couple earning £20,000 and £18,000 respectively will see their
joint tax and National Insurance bills fall by around £270 a year as a
result of the tax changes that come into force next month.
• Changes to controlled foreign companies (CFC) rules which came
into effect in 2013, have encouraged large global companies to
move their head quarters to UK. The new rules mean only UKgenerated income is taxed here, with a charge only arising on the
proportion of overseas profits that are “artificially diverted” from the
UK. The hope being that this will create jobs.
• The 50p top tax rate was scrapped in 2012.
Employment Law
• The Labour Government introduced Minimum Wage (£7.45
per hour) which has helped raise income levels.
• Women and ethnic minorities have been helped by equal
rights and discrimination legislation (Equality Act 2010).
• TV's fairy Jobmother Hayley Taylor said the unemployed
"need carrots, not sticks" to help them into the job market as
she examined policy, as unemployment and inflation rise to
levels not seen for years.
• Jobseekers risk losing benefits if they turn down certain
zero-hours contracts without good reason, the government
has said
Fairy Jobmother Interview
What were the ‘sticks’ that Fairy
jobmother was talking about?
Benefits Policy
• Cap on benefits to ensure that it is more worthwhile to be
working than on benefits. Households on working age
benefits can no longer receive more in benefits than the
average wage for working families.
• Universal Credit will replace many previous benefits.
• Personal Independence Payment (PIP) from 8 April 2013
that will eventually replace DLA for people aged 16 to 64.
• Employment and Support Allowance (ESA) replaced a
range of incapacity benefits in 2008 for customers making
a new claim because of illness or incapacity.
The North/South Divide
• Researchers at Cambridge University have found the wealth
gap between the South East and the rest of Britain is greater
now than at any other time since the Second World War.
IPPR has warned the North of England was being hit hard by
long-term joblessness.
Youth unemployment in Bradford is double the UK average.
The city is the third most affordable place in Britain to buy a
home. Incomes per head in inner London are the highest in the
European Union; those in Bradford are lower than the average
of the UK and the EU, which includes the still extremely poor
nations of the old communist bloc.
Average household incomes in London and the South East are
25 per cent above those in the North.
Boys born in Kensington (London) today 'will live 13.5 years
longer than those in Glasgow'
North/ South Divide
• Average household wealth in the south-east of England is
almost twice that in Scotland, according to the Office for
National Statistic's first "wealth in Great Britain" report.
• The theory held by some that the north-south divide was
slowly fading is false. By far the wealthiest area in 200608 was the south-east of England, with median household
wealth of £287,900, while Scotland was the worst off, with
a median of £150,600.
• Scotland was closely followed by the north-east and the
north-west, which had a median household wealth of
£169,500 and £168,200 respectively.
Causes of Wealth Inequality:
• The rapidly rising incomes of the richest 10% of the
population are the major factor contributing to growing
inequality in Britain.
• According to the Institute for Fiscal Studies (IFS), an
independent think tank, the incomes of the top 10% have
risen faster than those of the population as a whole since
Labour was in power in 1997.
• And that increase has been particularly concentrated at
the very top of the income distribution - among the half
million individuals in the top 1% of the income scale.
• Create and complete the following grid.
• Colour code the factors to demonstrate how significant you
think they are. Red being very, Amber slightly, Green very little.
Causes of
in Leave space to complete
interest rates and this this after the next lesson
makes lending from cycle.
banks more, or less
expensive, which will
then increase or reduce
• Think about why you have classes the factor in the way that
you did.
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