EXPERT HUB – BOOK BRIEFING: MOTIVATING HIGH EARNERS TO CARE ABOUT INCOME INEQUALITY

by: Inclusive Growth Contributor | on: 31.10.23 | in: Uncategorised

 By Dr Gerry Mitchell 

OVERVIEW

Uncomfortably Off investigates the top 10% of income earners – those earning £60,000 and above. Despite their relative advantage and comfort, they worry about their income, are anxious about the future and do not feel politically empowered.  

Most do not recognise themselves as high earners. The book explains why it is in their interest to pay attention to inequality and how that includes knowing where they stand relative to the rest of the country. This is because, despite their perceptions, high earners do wield significant influence, both in their work, the public conversation and politically. 

Even before Brexit, the pandemic and the cost-of-living crisis, those who, in principle, should have felt secure were already struggling financially or expressing anxiety about their or their children’s future.  

High earners are beginning to see the cracks in the meritocratic narrative. If they want to feel more comfortable, they will need to better understand the economic realities of other people. After all, that understanding has an impact on their politics and the current economic, social and political systems that they design, regulate and operate and are therefore best placed to change. 

This book draws on a 2020 international study* of the financial positions and attitudes towards inequality amongst the top 10% earners in the UK, Sweden, Spain and Ireland. Analysing cross-country study of economic and social trends, national survey data and 110 interviews. Plus follow-up interviews in 2022 in the UK. 

* feps-europe.eu/publication/752-inequality-and-the-top-10-in-europe 

FINDINGS

1. High earners are largely southern, middle-aged (between 45-49 and 50-54 age brackets) white men. They are massively overrepresented among managers and professionals; three quarters have tertiary education. 

2. They do not feel rich and have little to no idea where they fit in the income distribution. This is partly because they are looking up at the top 1% who are drifting away from them. Even if they are in the top 5%, on about £81,000, they are further away from the top 1% (£180,000 and over) than from the median earner (around £30,000).  

3. They still believe in meritocratic explanations of social mobility, but the link is weakening between reward for hard work and social goods/status. They are anxious about downward mobility – if not for themselves, for their children. 

4. They have misconceptions about their relationship with the welfare state, and their level of reliance on it over their life course. 

5. Their life is focused on work, but many among them, especially in the private sector, do not think it has a purpose beyond the bottom line. 

6. They vote regularly but are disaffected with politics and miss the ‘centre-ground’. 

7. They support redistribution but want taxes targeted at the highest earners, which do not include them.  

8. They believe the state is inefficient and markets efficient, almost by definition. 

9. They want corporations and those richer than themselves to be taxed further if it does not hurt UK competitiveness and is ambivalent on wealth taxes. 

10. They have multiple barriers to building social networks beyond their immediate circle and developing a greater sense of solidarity and belonging. 

IMPLICATIONS FOR POLICY

High earners have two possible options:  

1. stockpiling every advantage for themselves and their children to ensure their futures, 
2. contributing to a common safety net that benefits everyone. 

The latter is improbable, but more likely to happen if the point is made very clearly that it will not be possible for them to isolate themselves from mounting inequality for much longer.  

This will only happen if policy makers understand high earners’ perceptions of their relative economic position, their relationship with the state over their lifetimes, their economic security and the impact of inequality.   

Policy makers need to: 

1. Make the relationship between an individual’s financial contribution and their position within the income distribution much more transparent, for example, through the tax submission process.  

2. Convince high earners of the need for greater investment in policies that reduce inequality by showing them how greater inequality will negatively impact them and conversely how they will benefit from that increased investment.  

3. Demonstrate the importance of public services to them and their children.  

4. Show how greater public investment would address their current anxieties but also engender social solidarity, create stronger social cohesion across income groups and generations, reduce inequality and underpin a clearer sense of public good and the state’s public purpose. Public spending would therefore also become destigmatised and linked to notions of shared citizenship. 

You can download the book briefing here: 

uncomfortably-off-book-briefing