Scotland's top earners have increased their income at a greater rate than the rest of the nation's workers in the past decade, according to a report. Scotland’s highest earners have pulled away from the rest of the country’s workforce, after increasing their share of total incomes by nearly 50 per cent in a decade. 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,
It said those in the top 1% income bracket could expect to earn 20 times more than someone in the bottom 1%. The richest 1% of earners contribute a fifth of income tax raised in Scotland.
It says the explosion in “superstar” wages – typically for company chiefs and financial executives – has led to an overall increase in wage inequality over the past 20 years, with wage growth among low and middle earners failing to keep pace. Much of the increase in wage inequality in Scotland has been driven by increased part-time working. This was particularly the case in lower-paying occupations, and although this has increased inequality, the authors noted that some workers may prefer shorter hours. The report also suggested that another important factor has been the changing job market. The share of higher-paying and lower-paying jobs increased between 2001 and 2010, while the share of middle-wage jobs fell, which was as a result of technological change and globalisation.
David Bell, professor of economics at Stirling University, said: "Though an independent Scotland would have more powers to address inequality, its room for manoeuvre would be constrained by these wider forces. Inequality in Scotland, like in many developed nations, is partly being driven by technology, by trade, and even by how we decide to form households. So, there are likely to be limits to the extent that a small open economy can reduce inequality. Scottish independence would provide opportunities, but the constraints that already exist would not go away."
The report lists 35 OECD countries, and it ranked the UK seventh in terms of income inequality, behind Chile, Mexico, Turkey, the United States, Israel and Portugal. Scotland was ranked 18th, below Ireland, Spain and Italy but ahead of France, Sweden and Norway. Iceland was ranked the most equal country of the 35. While the taxation system means the UK is not rising up the list, the report says income inequality is increasing and being driven almost entirely by the wages of the top earners. Those in the top 2 per cent were ranked as those earning more than £86,000, while those in the top 1 per cent were earning more than £119,000. The report found that, in 1997, the top 1 per cent earned 6.3 per cent of total pre-tax incomes. By 2009, that had increased to 9.4 per cent – a rise of 49 per cent.
It said those in the top 1% income bracket could expect to earn 20 times more than someone in the bottom 1%. The richest 1% of earners contribute a fifth of income tax raised in Scotland.
It says the explosion in “superstar” wages – typically for company chiefs and financial executives – has led to an overall increase in wage inequality over the past 20 years, with wage growth among low and middle earners failing to keep pace. Much of the increase in wage inequality in Scotland has been driven by increased part-time working. This was particularly the case in lower-paying occupations, and although this has increased inequality, the authors noted that some workers may prefer shorter hours. The report also suggested that another important factor has been the changing job market. The share of higher-paying and lower-paying jobs increased between 2001 and 2010, while the share of middle-wage jobs fell, which was as a result of technological change and globalisation.
David Bell, professor of economics at Stirling University, said: "Though an independent Scotland would have more powers to address inequality, its room for manoeuvre would be constrained by these wider forces. Inequality in Scotland, like in many developed nations, is partly being driven by technology, by trade, and even by how we decide to form households. So, there are likely to be limits to the extent that a small open economy can reduce inequality. Scottish independence would provide opportunities, but the constraints that already exist would not go away."
The report lists 35 OECD countries, and it ranked the UK seventh in terms of income inequality, behind Chile, Mexico, Turkey, the United States, Israel and Portugal. Scotland was ranked 18th, below Ireland, Spain and Italy but ahead of France, Sweden and Norway. Iceland was ranked the most equal country of the 35. While the taxation system means the UK is not rising up the list, the report says income inequality is increasing and being driven almost entirely by the wages of the top earners. Those in the top 2 per cent were ranked as those earning more than £86,000, while those in the top 1 per cent were earning more than £119,000. The report found that, in 1997, the top 1 per cent earned 6.3 per cent of total pre-tax incomes. By 2009, that had increased to 9.4 per cent – a rise of 49 per cent.
No comments:
Post a Comment