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The Gap Between Rich And Poor Is Wider Than Ever.

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http://www.guardian.co.uk/money/2008/aug/0...ecutivesalaries

From the marbled 20th floor of a glass tower in Canary Wharf the view of the river is breathtaking. It snakes down to the Thames barrier, glinting in the sunset. Close to the new city lie the serried ranks of East End estate blocks. The view is typical of London: glossy new wealth nestling close to old and persisting penury. Precious little money has trickled down from this gilded new town in the sky to its neighbours below.

The view is a reminder of the widening gap. History, many like to believe, is a Whiggish tale of wealth, social progress and fairer distribution, an onward march: we all wear the same clothes, meet on equal terms on Facebook. Yet background predicts who will run the banks and who will clean their floors. It's not happenstance; it is largely pre-programmed. General mobility is a myth. The top 10% of income earners get 27.3% of the cake, while the bottom 10% get just 2.6%. Twenty years ago the average chief executive of a FTSE 100 company earned 17 times the average employee's pay; now it is more than 75 times. Since Labour came to power in 1997 the proportion of personal wealth held by the top 10% has swelled from 47% to 54%. Labour did try to tug in the opposite direction, but after Gordon Brown's last budget as chancellor axed the 10p tax rate, many of the lowest paid were left bearing a heavier burden.

Those who make the most money, meanwhile, seem less willing than ever to see it redistributed. Tax consultants Grant Thornton estimated that in 2006 at least 32 of the UK's 54 billionaires paid no income tax at all.

High-earners tend to be elusive, preserving their privacy at home and at work, journeying between them in expensive cars. But in sessions conducted by Ipsos Mori over two evenings we did meet partners in a law firm of international renown and senior staff from equally world-famous merchant banks. Their business is money, and they make it: the law partners earned between £500,000 and £1.5m per year, putting them in the top 0.1% of earners in the UK, while the merchant bankers ranged from £150,000 up to £10m.

We hoped to gain an insight into their notions of fairness - what might persuade them to share more of their wealth with others. What we encountered was a startling demonstration of ignorance. Here were professionals who deal daily with money, yet know next to nothing about other people's incomes. When asked to relate themselves to the rest of the population, these high-earners utterly misjudged the magnitude of their privilege.

How much, we asked our group, would it take to put someone in the top 10% of earners? They put the figure at £162,000. In fact, in 2007 it was around £39,825, the point at which the top tax band began. Our group found it hard to believe that nine-tenths of the UK's 32m taxpayers earned less than that. As for the poverty threshold, our lawyers and bankers fixed it at £22,000. But that sum was just under median earnings, which meant they regarded ordinary wages as poverty pay.

Mistakes such as these should disqualify the wealthy from pontificating about taxation or redistribution. And yet City views carry great weight with ministers and politicians of all parties.

Fortunately, Professor John Hills, director of the Centre for the Analysis of Social Exclusion at the London School of Economics, was on hand at the focus groups to provide correct figures. Once he had done so, one youngish banker said sheepishly: "My appreciation of the numbers was quite hopeless. Given my age and my level of experience in the City I wouldn't have thought that I would be so out of touch with reality." Another realised how much he had lost touch: "It sounds an awful thing to say, but I know people I went to school with, and I've no idea how they survive on the incomes they have." But they got over their initial embarrassment quickly enough. An encounter with the facts didn't seem to impinge in the ensuing discussion: in no time they reverted to an underinformed view of the world.

Justifying their own high incomes, they said: it's not us, it's globalisation, and anyway we are the nation's economic benefactors. "The goose that lays the golden egg is the people who come to London to make wealth," one said, echoed by all. The growing gap between rich and poor is "a reflection of the success of policies here . . . making the City one of the pre-eminent financial centres of the world". Another said defiantly (this was on the eve of the banking sector's implosion), "I don't think we should sit here and say London should be guilty for being successful." They put themselves inside a golden enclave, but one on which the entire UK depended for its wellbeing. Don't mess with its denizens: they deserve thanks for providing invisible exports and powering GDP growth. We high-earners belong to a global elite, able to work anywhere, always mobile.

But the City's importance is exaggerated. Finance, including the City, insurance and high street banks, forms 7.9% of the UK's GDP, compared with manufacturing at 14.7% and property services at 16.5%. Added together, hotels, catering and telecoms account for nearly the same share of GDP as finance. As for their threats of flight, both our bankers and lawyers turned out to be remarkably immobile, most having worked for their firms for a long number of years. The warmth with which they described their London lives with partners and children suggested they would be loth to leave.

"We work harder and aspire the most," one said. The longer we talked, the more they turned to moral reasons for success and failure, moving away from the structural globalisation reasons given above. One banker said: "It's a fact of modern life that there is disparity and 'Is it fair or unfair?' is not a valid question. It's just the way it is, and you have to get on with it. People say it's unfair when they don't do anything to change their circumstances." In other words, they see themselves as makers of their own fortune. Or, as another banker said, "Quite a lot of people have done well who want to achieve, and quite a lot of people haven't done well because they don't want to achieve."

One woman banker described escaping from a provincial town where the main employer was the public sector: "If you aspire to anything beyond that you're not going to live [there] any more, and that's the choice you make."

They had chosen a life that would make them rich while others, making different and morally equivalent choices, had abdicated their right to complain. "Some of these are vocational, things like nurses . . . It's accepted - they go into it knowing that that's part of the deal." Another said: "Many people, like teachers, don't do things for the pay. But you won't find a teacher that works as hard as we do." This was categorical, evidence unnecessary. They spoke of heroic all-nighters drawing up contracts for clients in time zones on the other side of the globe, a Herculean effort that justified fat pay. But did they work 10 times as hard as a teacher on £30,000 a year or, in the case of some lawyers and bankers, 100 times as hard? Such disproportionality did not enter their scheme of things.

None of us like to feel guilty about our comfortable lives, and it would have been absurd to expect mea culpas from these people just because they earned so much. What we had hoped for was more awareness, some recognition that their position needed explaining and even justification. Instead, with the exception of a couple of progressive lawyers, they simply denied they were rich.

They could scarcely deny they had money; indeed they spoke of the pleasures that high incomes bought. "I do enjoy the fact I can have nice holidays and don't think twice about buying particular items," said one lawyer. But most blocked out the suggestion they were extremely well off. Living in London cost a lot, they said: the city that made them rich was a reason you had to be rich. You had to afford London property. "I'm sick of this, because with £100,000 in Manchester you are well off; £100,000 is a not a wealthy person down here."

A lawyer admitted that he couldn't imagine surviving on an income as low as £100,000, and in discussions about higher tax bands his colleagues objected to any such low sum being used as a benchmark. One of the more imaginative lawyers described their social isolation: "We now live in a separate economy, we live on a separate level to the vast majority of people in the country. We don't send our kids to the same schools, we have more choice over schools, we have more choice over health, we have more choice over where we live, we have more choice over where we go on holiday and what we do for our jobs. And we live in a completely different world to the people we live next door to."

Anyone from the City prepared to argue why they work harder than say a nurse/teacher? Why is writing a contract heroically overnight more important than giving life saving care to an individual over night. Is more of the case the lawyers and bankers got lucky and work in an environment where working with large numbers somehow justifies getting paid a large number?

So a teacher working in an inner city school where gang and knife culture is rife is less economically important that some City lawyer/banker?

How much of the Citys wealth was due to the rest of us MEWing to the hilt?

I know that someone has posted on here that the banks are now likely to start cutting salaries so can these people cope on maybe earning £100,000 or would wage cuts give them serious economic problems as they've got huge mortgages?

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Well one key difference between the city and a nurse is that the city brings in investment income from abroad. The nurse does not earn us any money (directly).

Also the trouble with the Guardian mentality is that they'll want more tax to pay out more in benefits. This is NOT the answer to our malaise. It really annoys me when they go on about "lifting children out of poverty", when what they mean is dishing out more of working peoples' tax to single mothers.

Now don't get me wrong I am not defending the financial-world parasites. The government has encouraged and deregulated this sector at the expense of manufacturing. This is what needs putting right.

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http://www.guardian.co.uk/money/2008/aug/0...ecutivesalaries

Anyone from the City prepared to argue why they work harder than say a nurse/teacher? Why is writing a contract heroically overnight more important than giving life saving care to an individual over night. Is more of the case the lawyers and bankers got lucky and work in an environment where working with large numbers somehow justifies getting paid a large number?

So a teacher working in an inner city school where gang and knife culture is rife is less economically important that some City lawyer/banker?

How much of the Citys wealth was due to the rest of us MEWing to the hilt?

I know that someone has posted on here that the banks are now likely to start cutting salaries so can these people cope on maybe earning £100,000 or would wage cuts give them serious economic problems as they've got huge mortgages?

I think they will be the most screwed. It's not just the salaries, but they came to rely on their bonuses for an OTT lifestyle. With the bonus gone (often many times their salary in value) they will find it hard to make ends meet, such as private school fees, mortgage, cost of running several gas guzzling cars, mega credit cards, cleaners, nannys etc......

it's natural justice if you ask me.

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Well one key difference between the city and a nurse is that the city brings in investment income from abroad. The nurse does not earn us any money (directly).

Also the trouble with the Guardian mentality is that they'll want more tax to pay out more in benefits. This is NOT the answer to our malaise. It really annoys me when they go on about "lifting children out of poverty", when what they mean is dishing out more of working peoples' tax to single mothers.

Now don't get me wrong I am not defending the financial-world parasites. The government has encouraged and deregulated this sector at the expense of manufacturing. This is what needs putting right.

Now I'm not some kind of pinko lefty, but I don't actually believe the city generates any real wealth. They basically pull the same trick as Government and that is that they are close to where the money gets printed (metaphorically speaking).

If the level of cash in the economy falls, the city will suffer. If the cash were fed in at the bottom rather than the top the city would also suffer. All they have really done is traded assets and take margins on trading assets, this works great when credit is expanding but fails miserably when it contracts.

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Well one key difference between the city and a nurse is that the city brings in investment income from abroad. The nurse does not earn us any money (directly).

Also the trouble with the Guardian mentality is that they'll want more tax to pay out more in benefits. This is NOT the answer to our malaise. It really annoys me when they go on about "lifting children out of poverty", when what they mean is dishing out more of working peoples' tax to single mothers.

Now don't get me wrong I am not defending the financial-world parasites. The government has encouraged and deregulated this sector at the expense of manufacturing. This is what needs putting right.

The City does nothing of the sort and is simply another example of middlemen and hangers on getting wealthy because of the corrupt system we have developed. If you want to lift people out of poverty then you would have to completely dimantle the current debt based financial system with it's "I'm alright Jack parasites" and allow people the opportunity to work for there own well being. This would mean redistribution of land and resources from the few to the many. I don't think the few would like it much.

At least a nurse does something useful unlike the paper pushers in the world of abstract. The article clearly demonstrates the level of delusion. As someone who earns a similar amount to the people featured I can testify that my peer group remains completely unable to ascertain it's position in the world. Wealthy people who make out that they are simply average, or even poor.

They also think they possess unique skills and are simply irreplaceable. Guess what, you are, every single person on this planet is expendable. I got to my position in life because of my background, the schools I went to, the further education establishments I frequented, and the people I know. I am where people like me expect to be, at the top. Is it a result of a meritocracy, give me a break, of course it's not.

As for tax, as Leona Helmsley famously said, "only the little people pay tax". The poor subsidise the rich, this has always been the case in industrialised society.

I read the Telegraph, a leopard may not change it's spots, but I think it should be aware that it is a leopard.

Edited by SMAC67

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Those who make the most money, meanwhile, seem less willing than ever to see it redistributed. Tax consultants Grant Thornton estimated that in 2006 at least 32 of the UK's 54 billionaires paid no income tax at all.

Should have highlighted the above better re the tax position.

So 32 billionaires managed to pay no tax!!!!

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Well one key difference between the city and a nurse is that the city brings in investment income from abroad. The nurse does not earn us any money (directly).

Another problem is that money which quickly flows in can quickly flow back out meaning no wealth created.

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I think they will be the most screwed. It's not just the salaries, but they came to rely on their bonuses for an OTT lifestyle. With the bonus gone (often many times their salary in value) they will find it hard to make ends meet, such as private school fees, mortgage, cost of running several gas guzzling cars, mega credit cards, cleaners, nannys etc......

it's natural justice if you ask me.

Those big egos are going to take a battering - the money will go, the trophy wife will divorce. From where some of these people are sitting it will be the equivalent of moving from a semi in suburban UK to a tin shack in a South African shanty town.

It'll be an interesting experience for them. Being rich for all of your life would be pretty dull anyway.

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These *****ers will discover what their real value is when the bottom finally falls out of the economy. I doubt any of them have skill sets worthy of anything much beyond minimum wage.

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The only thing that all of us has of ANY value is Time!

I would also trust a nurse before a banker

with my health and (these days) my wealth

The UK is an enslaved nation of worker bees

and master honey monsters

Cry Freedom!

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Now I'm not some kind of pinko lefty, but I don't actually believe the city generates any real wealth. They basically pull the same trick as Government and that is that they are close to where the money gets printed (metaphorically speaking).

This

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I know quite a lot of senior lawyers. Some are partners in the biggest City firms, others are working in the American firms that are muscling in.

They live on a different planet financially. Huge sums of money earnt and a good percentage spent.

Admittedly they work hard but not THAT hard all the time. The main difference seems to be the sheer brain capacity to absorb huge amounts of information quickly and then provide excellent advice.

I've also met several other people who tried and failed to make the grade. They seem like normal pedestrian thinkers in comparison. All admit to finding the hours necessary to compensate for their lack of brain power impossible to maintain.

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http://www.guardian.co.uk/money/2008/aug/0...ecutivesalaries

Anyone from the City prepared to argue why they work harder than say a nurse/teacher? Why is writing a contract heroically overnight more important than giving life saving care to an individual over night. Is more of the case the lawyers and bankers got lucky and work in an environment where working with large numbers somehow justifies getting paid a large number?

So a teacher working in an inner city school where gang and knife culture is rife is less economically important that some City lawyer/banker?

How much of the Citys wealth was due to the rest of us MEWing to the hilt?

I know that someone has posted on here that the banks are now likely to start cutting salaries so can these people cope on maybe earning £100,000 or would wage cuts give them serious economic problems as they've got huge mortgages?

"Anyone from the City prepared to argue why they work harder than say a nurse/teacher? "

I work in the city but wouldn't say that people here work harder than nurses (having seen my baby delivered by emergency sunroof a couple of months ago I have full respect - they do a sterling job despite massive staff shortages). I also know several teachers (a few of my Uni friends), and am genuinely surprised if it is actually term time rather than school hols!!

"Is more of the case the lawyers and bankers got lucky and work in an environment where working with large numbers somehow justifies getting paid a large number?"

Partly luck, but I would suggest barriers to entry are higher

"How much of the Citys wealth was due to the rest of us MEWing to the hilt?"

Can you give an example?

"I know that someone has posted on here that the banks are now likely to start cutting salaries so can these people cope on maybe earning £100,000 or would wage cuts give them serious economic problems as they've got huge mortgages?"

They might cut bonuses (or get fired), but are unlikely to get salary reductions

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I know quite a lot of senior lawyers. Some are partners in the biggest City firms, others are working in the American firms that are muscling in.

They live on a different planet financially. Huge sums of money earnt and a good percentage spent.

Admittedly they work hard but not THAT hard all the time. The main difference seems to be the sheer brain capacity to absorb huge amounts of information quickly and then provide excellent advice.

I've also met several other people who tried and failed to make the grade. They seem like normal pedestrian thinkers in comparison. All admit to finding the hours necessary to compensate for their lack of brain power impossible to maintain.

What a load of cr0ck.

I worked in the City in sh-IT-e and the knowledge we need to cram to keep up every year is far more demanding than these bull sh1tters.

Obviously if you are in a bull market you are going to do big profits on ever bigger volumes - even the barrow boy Nick Leeson managed it in the first asian bull market. Also it's easy to bullsh1t people that you are 'gifted' when you are drunk and coked up most of the time.

I would like to rip off their heads and sh1t down their necks......

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How much, we asked our group, would it take to put someone in the top 10% of earners? They put the figure at £162,000. In fact, in 2007 it was around £39,825, the point at which the top tax band began. Our group found it hard to believe that nine-tenths of the UK's 32m taxpayers earned less than that.

Go stand in your local out-of-town shopping centre carpark, look at the cars therein, paying particular attention to the year of manufacture, and tell me it doesn't look like there are a lot of people "doing really well". Yes, we all know it's based on an orgy of debt, but equally it's very hard to tell the difference between a genuine high-earner's Range Rover and mega-borrower's Land Rover just by looking at it. Likewise, all those very new vehicles... it's very easy to get the impression that most of Britain isn't bathed in cash.

Oh, and in case you're thinking "bloody Southerner, London wages are higher anyway", the most extreme example of this I've seen to date (by a long, long way) was in the carpark for Braehead, a large out-of-town (effectively) shopping complex in Glasgow. In terms of vehicle age especially, it made the equivalent carpark in Guildford look like the pits at a banger racing meeting.

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Those big egos are going to take a battering - the money will go, the trophy wife will divorce. From where some of these people are sitting it will be the equivalent of moving from a semi in suburban UK to a tin shack in a South African shanty town.

It'll be an interesting experience for them. Being rich for all of your life would be pretty dull anyway.

This is what happened to all those tech geeks in Silicon Valley after the Dot Com crash.

Lives built on foundations of sand...when will they ever learn? when will.....

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What a load of cr0ck.

I worked in the City in sh-IT-e and the knowledge we need to cram to keep up every year is far more demanding than these bull sh1tters.

Obviously if you are in a bull market you are going to do big profits on ever bigger volumes - even the barrow boy Nick Leeson managed it in the first asian bull market. Also it's easy to bullsh1t people that you are 'gifted' when you are drunk and coked up most of the time.

I would like to rip off their heads and sh1t down their necks......

I was talking about senior lawyers and you seem to read that as City wide boys like Nick Leeson.

Given your attention to detail I assume most of your "complex" IT solutions never work!

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I think they will be the most screwed. It's not just the salaries, but they came to rely on their bonuses for an OTT lifestyle. With the bonus gone (often many times their salary in value) they will find it hard to make ends meet, such as private school fees, mortgage, cost of running several gas guzzling cars, mega credit cards, cleaners, nannys etc......

it's natural justice if you ask me.

"It's not just the salaries, but they came to rely on their bonuses for an OTT lifestyle."

I'm not convinced by this

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These *****ers will discover what their real value is when the bottom finally falls out of the economy. I doubt any of them have skill sets worthy of anything much beyond minimum wage.

A fair number of our traders are pretty well educated with PHD's etc. I'm sure they would be able to find something else.

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I note some suggest the brutal muder of two honeymooning, medical staff on Antigua may have had some kind of wealth jealousy motive.

I also note that Carluccio's staff earn a basic wage some £1.60 below the minimum wage.

If I took my latte here, I might be tempted to buy a stab vest. Happy dining ...

Edited by Sledgehead

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http://www.guardian.co.uk/money/2008/aug/0...ecutivesalaries

Anyone from the City prepared to argue why they work harder than say a nurse/teacher? Why is writing a contract heroically overnight more important than giving life saving care to an individual over night. Is more of the case the lawyers and bankers got lucky and work in an environment where working with large numbers somehow justifies getting paid a large number?

So a teacher working in an inner city school where gang and knife culture is rife is less economically important that some City lawyer/banker?

How much of the Citys wealth was due to the rest of us MEWing to the hilt?

I know that someone has posted on here that the banks are now likely to start cutting salaries so can these people cope on maybe earning £100,000 or would wage cuts give them serious economic problems as they've got huge mortgages?

What is your definition of working harder? Actually, what is your definition of working hard for that matter? Working long hours doing something you have been trained to do repetatively is TIRING work not HARD work. HARD work is using your brain to solve problems day in day out.

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A fair number of our traders are pretty well educated with PHD's etc. I'm sure they would be able to find something else.

I doubt it, high wage jobs will be few and far between. Unless you're in the top 1% (who always win) you're going to get screwed. Us at or near the bottom have always known this. These deluded pretenders mind, will struggle to adapt.

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  • 395 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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