I read an article that discusses the rising inequality in England. The salaries of the rich increased at a significantly faster rate than the salaries of the poor. The earnings of chief executives of leading organizations increased by 11.2% and the earnings of senior corporate managers increased by 7.1%. On the other hand, the earnings of waiters and waitresses decreased by 11.2% and the earnings of cleaners fell 3.4%. Earnings are also decreasing in real terms. Overall, the average earnings went up by only 0.4% in gross terms while the inflation rate is 5%. A similar trend happened to the United States from 1970-2000. Unless something changes, inequality in England will end up being high as it is currently in the United States.
In my opinion, the rising inequality is because of the recession. Companies are trying to cut costs and the easiest way to do it is to lower salaries or fire people. The top earners decide how to lower total salary costs. And they usually decide to lower the salary of the low-skilled workers rather than lowering their own top executive level salaries. Unless the government somehow intervenes, this trend will probably continue.
Source: http://www.guardian.co.uk/
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