Fact of the Day

More than 50,000 families are living below the poverty line in Edinburgh, Scotland's most affluent city. Edinburgh is exposed as "a city divided" in a report that shows that despite average incomes being 9% above the rest of Scotland, one in five households is living below the poverty threshold.

The poverty line is measured at £125 per week if people are single, £258 if they are a single parent family and £349 for a couple with two children.

Scotland's 1%

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.

Fact of the Day

The survey, which is based on publicly available data, breaks down wealth to an average of $51,600 per adult around the globe, but in reality only a tiny sliver of the world’s population at the wealthiest end owns 86%  of the wealth.

Some 3.2 billion individuals—two thirds of the world’s population—have less than $10,000 each, the Swiss bank found. The top of the pyramid,  numbers just 32 million people who have $1  million or more, about 41% of global wealth. Nearly half of them live in the United States.

Fact of the Day

Even ancient Rome was more egalitarian than the world today. Marcus Crassus, whose wealth was calculated as being roughly equal to that of the empire's entire government treasury, had an annual return on it equal to the average yearly income of 32,000 Romans. But that, to use Boris Johnson's description of a £250,000 paycheck, is chicken feed. If one measure of wealth, and there are many, is how many of your compatriots you can buy, then give a big hand for magnate Carlos Slim, the interest or return on whose stash is the equivalent of the average annual wage of 400,000 Mexicans.

http://www.theguardian.com/books/2013/oct/08/plutocrats-rise-new-global-super-rich-review

Divided Scotland

Scotland's wealthiest households are now 273-times better off than the most deprived, according to Oxfam Scotland and the gap is widening. 

The number of workers who live in poverty has gone from 255,000 to 280,000 since 2008.

The report said that working tax credits were "effectively subsidies from the public purse to employers paying poverty wages", and that all employers should pay a living wage. Businesses paying less than the living wage cause the State between £5.9bn and £6.3bn each year.

The report explains "Experiencing poverty in this rich country is also intensely stressful. Stigmatisation through media and political rhetoric adds to individuals' sense of anguish and isolation. They, not society, nor the economy, are blamed for their poverty. Meanwhile, pressures to consume abound in a culture that elevates status and image above relationships, community contribution or care for the environment."

Judith Robertson, head of Oxfam Scotland, said she believed the existing economic model was not working. She added: "Despite decades of economic growth and a myriad of anti-poverty policies, the reality for too many Scots is a cocktail of high mortality, economic inactivity, mental and physical ill-health, poor educational attainment and exclusion from the decisions that affect them...We need to create a new prosperity that will benefit everyone in society. At the heart of this new prosperity would be community-led economies which focus on the quality and distribution of growth, creating livelihoods for the many, not profits for the few. Our economy shows this is practical and achievable. We just need the will to work together to make it happen.".

It will take a lot more than what Oxfam expects and much more than any capitalist government can be expected to deliver. It will require a socialist revolution to change society and transform the economy into one that is based upon providing for peoples needs and not to supply profits to the wealthy. 

Oxfam can identify the problem but falls short on the solution. 

Fact of the Day

0.1% of the world population hold 81% of the wealth and the ratio of poverty to wealthy statistic went from 3:1 in 1820 to 35:1 in 1950 to nearly 80:1 today.

Who put the swizz in Switzerland

Statistics say the Swiss are the richest people in the world, with net financial assets of nearly $148,000 per capita. That is a third more than the average for the next two wealthiest nations-Japan and the United States. But the ownership of that wealth, including stocks or physical assets such as land and housing, is much more unequally shared in the nation. 

The top 1 percent in Switzerland control more than a third of the nation’s wealth, which is slightly larger than the share owned by the richest 1 percent in the United States. Switzerland also has the highest density of millionaires in the West, with 9.5 percent of all households having $1 million or more, and the greatest number of ultra-rich families - 366 households worth more than $100 million. Ten percent of all the world’s billionaires live there. The number of super-wealthy foreigners lured to Switzerland has doubled in the last decade, to more than 5,000. Their taxes are based on the rental value of their property rather than their income or wealth, on the condition that they do not work in the country.

Swiss companies accounted for five of the top 10 best-paid chairmen in Europe in 2011. Nestle Chairman Peter Brabeck has accumulated a fortune of up to $215 million. Credit Suisse’s  CEO, Brady Dougan received $75 million stock windfall he received in 2009. The annual list of Switzerland’s wealthiest 300 people published by Bilanz names has Ikea founder Kamprad in first place, at $38 billion.

Fact of the Day

The world's richest 100 people earned enough last year to end extreme poverty for the planet's poorest people four times over, Oxfam said. report

 The net income last year of the 100 richest people was 240 billion US dollars (£150 billion) in its report.

Have cash can travel

The cost of train tickets increased by 3.9 per cent this month  but Scotrail boss Stephen Montgomery won't be too inconvienienced. His pay package rose from £279,000 in 2011 to £333,000 last year, a £54,000 rise, which includes bonuses, a car allowance and National Insurance contributions. The firm, which is owned by Aberdeen-based FirstGroup. His boss Tim O’Toole, head of FirstGroup, stands to pick up share awards of nearly £1m, on top of a basic salary £846,000.

Wal-Mac

McDonald's sells more than 75 hamburgers every second. McDonald's' daily customer traffic 62 million, that's about 1 percent of the world's population. McDonald's' $27 billion in revenue makes it the 90th-largest economy in the world. The $8.7 billion in revenue from franchise stores alone, makes McDonald's richer than Mongolia. McDonald's hires around 1 million workers in the US every year ( a 700,000 domestic workforce with 150% turnover rate.) According to company estimates, one in every eight American workers has been employed by McDonald's. Americans alone consume one billion pounds of beef at McDonald's in a year – five and a half million head of cattle. McDonald's has 761,000 employees worldwide, that's more than the population of Luxembourg. From 2011 to 2013, McDonald's plans to open one restaurant every day in China. McDonald's is the world's largest distributor of toys, with one included in 20% of all sales. McDonald’s CEO Jim Skinner receives $8.75 million a year. Twenty years ago the CEO’s compensation was about 230 times that of a full-time worker paid the federal minimum wage now its 580 times.  Profit growth for period 2007 - 2011 was 135%. Dividends and stock buybacks last fiscal year $6 billion, the equivalent of $14,286 per restaurant worker employed by the company.

But guess what, there's an even bigger and more important company.

In  2012, Wal-Mart registered approximately $444 billion in sales, which is $20 billion more than Austria's GDP. If Walmart were a country, it would be the 26th largest economy in the world. Walmart has more employees worldwide — 2.2 million — than the population of Houston. The mega-retailer employs 1.4 million people in the U.S. alone. f Wal-Mart was an army, it would have the second largest military in the world, behind China. Wal-Mart is bigger than Home Depot, Kroger, Target, Sears, Costco, and K-Mart combined. The average family of four spends over $4,000 a year at Walmart. One of every four dollars Americans spend on groceries is spent at Walmart. Each week, Walmart serves more than 200 million customers at more than 10,400 stores in 27 countries. In 2010, CEO Michael Duke's annual salary of $35 million earned him more in an hour than a full-time employee makes in an entire year. The Walton family has given away about 2 percent of its net worth to charity — Bill Gates is giving away 48 percent of his net worth and Warren Buffet 78 percent of his net worth. An additional Walmart Supercenter per 100,000 residents increases the obesity rate by 2.4 percent. Roughly 4,700 (about 90 percent) of international stores operate under a banner other than Walmart, including Walmex in Mexico, Asda in the UK, Seiyu in Japan, and Best Price in India. Dividends and stock buybacks last fiscal year $11.3 billion. The Walton family has  some $93 billion in wealth, just under 0.14% of all US wealth, more than bottom 30% of Americans (49 million)

The total number of people employed in the U.S. at Wal-Mart Stores Inc. and McDonald’s and Yum Brands restaurants exceeds the entire 2.7 million population of Chicago. Net income at those three companies has jumped by at least 22 percent from four years ago. Shareholders, not employees, have reaped the rewards. At the same time, companies have formed an effort to freeze the minimum wage, whose purchasing power is 20 percent less than in 1968. Minimum-wage earners have less power to demand higher pay because so many adults are willing to take low-wage positions.

 25% of Americans (or bottom 75 million) don’t have any net wealth at all. Their debts are higher than their assets.

The 1.2 million households whose incomes put them in the top 1 percent of the U.S. saw their earnings increase 5.5 percent last year, according to census estimates. Earnings fell 1.7 percent for the 97 million households in the bottom 80 percent -- those who made less than $101,583.

Fact of the Day

Nearly half the French people consider themselves poor or fear they soon will be, said a survey.

Salaried employees, manual labourers and independent workers felt the most exposed to poverty, while executives and professionals felt the least exposed.

 Unemployment numbers stand 10%—the worst since 1999. Youth unemployment hit 24.9%, the highest since the data series began in 1996.

Increasing misery

Jérôme Sainte-Marie, director of the political opinion department at the market research firm CSA, which had conducted the survey, was worried that France has “entered a new era.” This was now no longer a question of “lowered status but of pauperization.” Many French people not only had the impression of being “worse off than their parents or worse off than hoped,” but they worried “that they could be thrown into misery, if they aren’t already in it.”

Facts of the Day

The world's 1,226 billionaires have more combined wealth than 3.5 billion people - half the entire planet's population. The richest 10 per cent of the world's population takes 90 per cent of the world's income.
$21 trillion is estimated to have been transferred in the tax havens - 10 per cent of all the world's privately held wealth. This is also more than 10 times the total value of development aid given to the world's poorer nations in the past 20 years.

http://www.aljazeera.com/indepth/opinion/2012/11/20121126134721926547.html

Fact of the Day

According to economics professor John Foster, the aggregate wealth of Britain’s richest 1,000 people was in 2010 some £333 billion, equivalent to half 2010's national debt.

 

Nothing new in New Zealand

New Zealand today has one of the worst rates of income inequality compared with other developed or wealthy countries. Two-income families are increasingly worse off than single-income families were a generation ago.

Inequality has increased here faster than in any other Organisation for Economic Co-operation and Development (OECD) country. Most of the increase has been the result of larger rises in overall incomes for the top 20 per cent of income earners; and incomes for the bottom 20 per cent have decreased over the two decades from the mid-1980s. To make things worse, wealth is even more unevenly distributed than income and the level of wealth inequality is twice that of income inequality.

The most recent statistics available show wealth inequalities have increased to the extent that the top 10% of the population accounts for 51.8% of the country's net worth, while the bottom 50% of people owns just 5.2%

Over 500,000 people live in households with "negative wealth" - that is, they have more debt than income - and half of New Zealand income earners cannot afford to save.

Those on middle incomes are also bearing the brunt of the rich getting richer and the poor getting poorer, among them 200,000 children living in poverty. Federation of Family Budgeting Services chief executive Raewyn Fox  said she had seen a large increase in the number of people who might be considered "well off" coming in for advice on how to handle their money. She said easy access to credit (another ploy of the rich) was a trap that too many people fell into, without giving thought to the future and something tipping the balance and leaving them in a financially dangerous position.

Italian Inequality

The Bank of Italy reveals that the wealth of the country's 10 richest individuals equals that of Italy's 3 million poorest.

10% of the richest Italian families own 40% of net national wealth

Whats fair and unfair?

The recent riots in east Belfast led to renewed hand-wringing about the "Protestant working class". Protestants are not the only ones to suffer deprivation. They've not been disadvantaged more than Catholics. As the anti-poverty strategy launched under direct rule in 2005, Lifetime Opportunities, put it, "the geography of deprivation has persisted stubbornly over the past 30 years". It is simply wrong for prostestant paramilitaries and loyalist 'community workers' to claim that Catholics have benefited from public expenditure largesse at their expense. The same - disproportionately Catholic - neighbourhoods in north and west Belfast and Derry top the league of social disadvantage as when the 'Troubles' began.

The whole idea of socialism is that we should show solidarity towards others, regardless of colour or creed, who face the same daily struggles as ourselves - that we can unite in support of collective political solutions to our individual problems.

Meantime, elsewhere, the chief executives at FTSE 100 companies saw their median earnings rise 32 per cent last year, treble the rise in share prices and well above workers’ average 2 per cent pay award, according to MM&K, a reward consultancy, and Manifest, a proxy voting agency. The corporate leaders’ median salary rise was just 2 per cent but total earnings were boosted by a 70 per cent increase in pay-outs under incentive plans and share option schemes. FTSE 100 chief executives’ pay was 47 times that of average employees in 1998 but had risen to 120 times by 2010, say MM&K and Manifest. Bosses’ packages have more than doubled in value over that period.

not watered down

Five bosses at publicly owned Scottish Water have shared in a one-off bonus pay-out of more than £450,000. Chief executive Richard Ackroyd was handed £78,900 as part of the deal, meaning he took home £420,000 in total last year. Finance chief Douglas Millican and asset management director Geoff Aitkenhead both got bonuses of £103,000 to top up their total pay of £230,000. Commercial director Chris Banks was paid £95,481 as part of the scheme, on top of his £217,000 salary, while customer service delivery director Peter Farrer, who was paid £211,000, got a bonus of £72,744.

"It's simply obscene for five directors of a public company to trouser half a million pounds between them in bonuses on top of an existing pay packet that's already two and a half times that. Public services are being closed down while workers face pay freezes and compulsory redundancies, yet this gilded elite make more in a month than most people make in a year." Green Party co-leader Patrick Harvie said.

edinburgh-unequalled

The gap between rich and poor in Edinburgh is bigger than in most other UK cities. Centre for Cities analyst Paul Swinney said: "It shows that despite Edinburgh's very strong performance in the ten years before the recession, that prosperity was not necessarily shared equally."

It ranked eighth for earnings, with an average weekly wage of £516.70.

cynicism and scepticism

The Big Issue carries an article on Edinburgh's rich/poor divide .JK Rowling has written about the shock of first moving to a council estate in the city and finding “violence, crime and addiction were part of everyday life in that part of Edinburgh… yet barely 10 minutes away was a different world, a world of cashmere and cream teas”.

Susan Carr, who runs the Craigmillar Neighbourhood Alliance explains how an ongoing regeneration project has stalled due to the economic downturn.“Given we’re only 10 minutes from parliament, in one of the wealthiest cities in Europe, the level of deprivation does seem outrageous...”
Carr’s colleague Norrie Davis, a lifelong Craigmillar man, says they are all “living in hope” that a new secondary school and library will be completed and that half-finished homes will be sold. “Everything’s slowed down because of the recession..."

Kirsty McLaron, 33, says “things have quietened down an awful lot, apart from one of two troublemakers”, but she doesn’t give Labour any of the credit. “They haven’t done anything for this area at all. I don’t really care if the Tory boy gets in – it can’t be any worse than Labour.”
One of her neighbours, 63-year-old Peter Kane, concurs. “The area’s got a hell of a lot better. A hell of a lot. I remember the days when you couldn’t even walk about safely in the daytime.” but he won’t put any of the improvement down to Labour politicians in London or Edinburgh. “The thing that sickened me was the MPs’ expenses,” he tuts. “They’ve been screwing us at every opportunity, and I don’t see any reason to vote for Labour now.”

As Socialist Courier says "Tweedledum or Tweedledee"

one rule for them , another rule for us 2

We read
Scottish Water's chief executive, Richard Ackroyd earns a basic salary of £263,000 plus a 40 per cent bonus.
Junior employees at Scottish Water have bonuses limited to around 5 per cent of their salary.