Share of GDP paid to low earners down 25% in 30 years

Share of GDP paid to low earners down 25% in 30 years l Matthew Whittaker l Resolution Foundation l Left Foot Forward – http://j.mp/rqbXpq

RT @leftfootfwd Share of GDP paid to low earners down 25% in 30 yrs http://t.co/5hx4mOP writes Matthew Whittaker #falseeconomy

RT @leftfootfwd Share of GDP paid to low earners down 25% in 30 yrs http://t.co/5hx4mOP writes Matthew Whittaker #falseeconomy

Share of GDP paid to low earners down 25% in 30 years l Matthew Whittaker l Resolution Foundation l Left Foot Forward – http://j.mp/rqbXpq

RT @leftfootfwd Share of GDP paid to low earners down 25% in 30 years: http://bit.ly/ngTHdI writes Matthew Whittaker

Share of GDP paid to low earners down 25% in 30 years l Matthew Whittaker l Resolution Foundation l Left Foot Forward – http://j.mp/rqbXpq

RT @leftfootfwd Share of GDP paid to low earners down 25% in 30 yrs http://t.co/5hx4mOP writes Matthew Whittaker #falseeconomy

Share of GDP paid to low earners down 25% in 30 years: http://bit.ly/ngTHdI writes Matthew Whittaker

Share of GDP paid to low earners down 25% in 30 years l Matthew Whittaker l Resolution Foundation l Left Foot Forward – http://j.mp/rqbXpq

RT @leftfootfwd Share of GDP paid to low earners down 25% in 30 yrs http://t.co/5hx4mOP writes Matthew Whittaker #falseeconomy

Share of GDP paid to low earners down 25% in 30 years l Matthew Whittaker l Resolution Foundation l Left Foot Forward – http://j.mp/rqbXpq

Share of GDP paid to low earners down 25% in 30 years: http://bit.ly/ngTHdI writes Matthew Whittaker

Share of GDP paid to low earners down 25% in 30 years: http://bit.ly/ngTHdI writes Matthew Whittaker

RT @leftfootfwd: Share of GDP paid to low earners down 25% in 30 years http://t.co/YLjMDeG << the GDP % paid as salaries is also going down

RT @leftfootfwd: Share of GDP paid to low earners down 25% in 30 years http://t.co/Mx0O0WD

RT @leftfootfwd: Share of GDP paid to low earners down 25% in 30 years http://t.co/Mx0O0WD

Share of GDP paid to low earners down 25% in 30 years: http://bit.ly/ngTHdI writes Matthew Whittaker

RT @leftfootfwd Share of GDP paid to low earners down 25% in 30 yrs http://t.co/5hx4mOP writes Matthew Whittaker #falseeconomy

“the share of GDP paid as wages to the bottom half of earners has fallen by a quarter”

“In 1977, workers in the bottom half of the earnings distribution received £16 of every £100 of value generated in the economy; by 2010, their share had fallen to just £12.”

Not being funny, but which is it – the share of GDP *paid as wages* to the bottom half of earners down by a quarter, or the total share of GDP going to the bottom half of earners down by a quarter? (What about redistribution via tax credits etc.?)

Share of GDP paid to low earners down 25% in 30 years: http://bit.ly/ngTHdI writes Matthew Whittaker

And the front page of today’s Excess was trumpeting the news that millions of people will be better off because share dividends had risen!!

@ 1. Ash

“Tax credits” – aren’t they those things used to subsidise capitalists who pay low wages?

@ 3 George

I supposed that’s part of their purpose, yes. Although plenty of families (mine included) get Tax Credits even though their wages are not remotely low.

In any case, it would be nice to get clear on what’s happened over the past thirty years – are those in the bottom half of the income distribution getting a smaller slice of the pie overall, or has there simply been a shift from wages to benefits?

Hi Ash, thanks for the question about tax credits and benefits. They’re not actually included in the GDP (or, more accurately Gross Value Added) equation because they’re transfer payments rather than the new generated value. The £16 and £12 figures therefore relate specifically to wages.

In simple terms, GVA can be broken down into labour payments and profits. Over the 30 years, profits have increased at the expense of wages (and explain part of the decline for those in the bottom half), but the much bigger factor (explaining about two-thirds of the overall fall) is growing wage inequality.

In short, the wage pie has shrunk as a share of GVA, and the share of the pie taken by workers in the bottom half has also shrunk, creating a double-whammy. The full report goes into all this in much more detail and puts figures next to the various contributions.

Hope that helps clarify.

Share of GDP paid to low earners down 25% in 30 years http://t.co/saqS17O (via @summify from @TheRightArticle, @FalseEcon, and 3 others)

Share of GDP paid to low earners down 25% in 30 years: http://bit.ly/ngTHdI writes Matthew Whittaker

It does indeed, thanks Matt.

Share of GDP paid to low earners down 25% in 30 years l Matthew Whittaker l Resolution Foundation l Left Foot Forward – http://j.mp/rqbXpq

@3 – Only if you do the RIGHT kind of work. Part-time? No dice.

And I’m sure that government payments are being used to prop up the wages of some, but not all, people at the lower end of the income spectrum. It’s the sort of thing that business loves, really.

That’s why the proposals to slash the minimum wage are such a sham, the companies know that they’ll be able to dump some of their support costs off onto government. And then there’s people who fall through the cracks…

(I was able to live in London, last year, on under “two hours” a week. How? Because the job assumed multiple hours of work actually done per paid hour, and had a *very* high hourly rate. But no tax credits for me!)

RT @leftfootfwd: Share of GDP paid to low earners down 25% in 30 years http://t.co/nb5mv4Y