Britain risks heading to US levels of inequality, warns top economist
Rising inequality in Britain risks putting the country on the same path as the US to become one of the most unequal nations on earth, according to a Nobel-Prize winning economist.
Sir Angus Deaton is leading a landmark review of inequality in the UK amid fears that the country is at a tipping point due to a decade of stagnant pay growth for British workers, the Guardian reported.
The Institute for Fiscal Studies (IFS) think tank, which is working with Deaton on the study, said the British-born economist would ‘point to the risk of the UK following the US’ which has extreme inequality levels in pay, wealth and health.
Speaking to the Guardian at the launch of the study, he said, “There’s a real question about whether democratic capitalism is working, when it’s only working for part of the population.
“There are things where Britain is still doing a lot better [than the US]. What we have to do is to make sure the UK is inoculated from some of the horrors that have happened in the US.”
His warning came as analysis from the Trades Union Congress (TUC) showed that real wages in the finance sector had outstripped average salaries in the UK over the decade since the financial crisis. Earnings after inflation in the finance sector have grown by as much as £120 a week on average, compared with the average British worker still being about £17 a week worse off after taking account of rising living costs over the past decade.
Frances O’Grady, the TUC general secretary, said, “It’s not right that pay is racing ahead in the city when most working people are still worse off than a decade ago.”
Deaton said geographical inequality appeared to be a factor in the UK, with London benefiting disproportionately compared with other parts of the country.
“People really feel that not everybody is having a fair crack anymore,” the US-based economist said.
“There’s a sense that if you live in one part of Britain away from the capital, lots of bad things are happening, while lots of good things are happening in the capital — and you don’t see why you should be left behind that way.”
Deaton, a professor at Princeton, won the Nobel Prize in his field for work charting global developments in health, wellbeing and inequality in 2015.
The US is ranked on some measures among the most unequal of major nations. Pay for non-college-educated men has not risen for five decades, while mortality for less-educated white men and women in middle age has led to average life expectancy to fall for the past three years, something that has not happened for a century.
Launched amid growing international concern over inequality and the rise of more extreme political ideologies in several countries, the IFS Deaton Review will span five years and look at inequalities in areas such as income, wealth, health, social mobility and political participation.
In a research paper accompanying the launch by IFS researchers Robert Joyce and Xiaowei Xu, figures show that ‘deaths of despair’ in Britain have more than doubled among men since the early 1990s. This concept was coined by Deaton in an earlier study and refers to deaths from suicide and drug-and alcohol-related issues.
In a reflection of the pressure on certain groups in society as inequality grows across Britain, the number of such deaths per 100,000 adults has risen from about 30 to 61 for men and from 15 to 26 for women over the period. Deaton believes these figures are an early warning sign of the UK developing
characteristics of inequality similar to the US.
Deaton warned that rising inequality was not a uniform phenomenon in the UK, judging by mortality statistics.
“One part we do know is that it seems to be geographically unequal,” Deaton said, referring to deaths from suicide, drugs and alcohol. “Blackpool seems to be a hotspot and the north east, but not very much in London. So it maybe that it’s geographical inequalities in health that are much more important here than in the US.”
On some measures, inequality in Britain has remained relatively steady over recent years, despite having rapidly accelerated in the 1980s.
Some economists point to the Gini coefficient — a sliding scale between zero to 100 percent used by academics where a reading of 100 percent would indicate that one person received everything. The gauge has remained stable since the 1990s, although it rose slightly last year from 31.4 percent to 32.5 percent.
However, the headline measurement of inequality masks significant differences for households in modern Britain, which Deaton said were important to consider.
According to the IFS paper, the richest one percent in Britain have seen the share of household income they receive almost triple in the last four decades, rising from three percent in the 1970s to about eight percent. Average chief executive pay at The Financial Times Stock Exchange (FTSE) 100 Index firms has risen to 145 times that of the average worker, from 47 times as recently as 1998.
Earnings in the lowest-earning working households have barely risen since the mid-1990s, compared with greater increases for higher-income groups.
A spokesman for the Treasury said, “Our policies are highly redistributive — this year the lowest income households will receive over £4 in public spending for every £1 they pay in tax, while the highest income households will contribute over £5 in tax for every £1 they receive in public spending. Income inequality is lower now than it was in 2010.”
New Zealand’s world-first ‘wellbeing’ budget to focus on poverty, mental health
Child poverty, domestic violence and mental health will be the priorities in New Zealand’s ‘wellbeing budget’, the finance minister announced, with the nation declaring itself the first in the world to measure success by its people’s wellbeing.
On Tuesday Grant Robertson said that despite New Zealand’s ‘rockstar’ economy many New Zealanders were being left behind, with home ownership at a 60-year low, the suicide rate climbing and homelessness and food aid grants on the rise, the Guardian reported.
According to predictions by the International Monetary Fund, the New Zealand economy is expected to grow at around 2.5 percent in 2019 and 2.9 percent in 2020. But Robertson emphasized many New Zealanders were not benefitting in their daily lives.
Although comparable countries such as the UK have begun to measure the national rate of wellbeing, New Zealand is the first western country to design its entire budget around wellbeing priorities and instruct its ministries to design policies to improve wellbeing.
“Sure, we had — and have — GDP (Gross domestic product) growth rates that many other countries around the world envied, but for many New Zealanders, this GDP growth had not translated into higher living standards or better opportunities,” Robertson said.
“How could we be a rockstar, they asked, with homelessness, child poverty and inequality on the rise?”
The 2019 budget will be handed down on May 30.
“For me, wellbeing means people living lives of purpose, balance and meaning to them, and having the capabilities to do so,” said Robertson.
“This gap between rhetoric and reality, between haves and have-nots, between the elites and the people, has been exploited by populists around the globe.”
Robertson cited a cultural rehabilitation program for Māori high-security prisoners, aimed at reducing high rates of recidivism and reoffending, as the kind of project that would be prioritized in the budget.
The opposition National Party has criticized the budget as being out of touch with New Zealanders’ values, and said what Kiwis really needed to improve their lives was better infrastructure and public services.
“According to this framework the government’s put in place, making a new friend is almost twice as valuable as not having to go to the emergency department,” said the National Party’s spokeswoman on finance, Amy Adams, earlier in the year.
“Or getting on better with your neighbors is twice as valuable as avoiding diabetes — I just think it starts to become a nonsense,”
The Kingdom of Bhutan kick-started the global wellbeing focus with the introduction of the Gross National Happiness Index in 2008, measuring things such as psychological health, living standards, community vitality and environmental and cultural resilience to inform government policy making.
But despite the index, the country remains a ‘least developed country’ and the unemployment rate is rising. Bhutan also ranks 96 spots below the world’s happiest country, Finland, as defined by the UN in its annual World Happiness Report.
US jury awards $2b damages in Roundup weedkiller cancer claim
A jury in California awarded more than $2 billion (£1.5 billion) to a couple who said the weedkiller Roundup was responsible for their cancer.
It is the third time that the German pharmaceutical group Bayer has been ordered to pay damages over its glyphosate-based herbicide, BBC News reported.
The jury ruled the company had acted negligently, failing to warn of the risks associated with the product.
Bayer denied the allegations. It insisted that Roundup is safe to use.
The company acquired the product last year as part of a $66 billion takeover of US rival Monsanto.
On Monday, a jury in Oakland, California, said Bayer was liable for plaintiffs Alva and Alberta Pilliod contracting non-Hodgkin’s lymphoma.
Lawyers for the couple, who are in their 70s, described the damages award as ‘historic’.
“The jury saw for themselves internal company documents demonstrating that, from day one, Monsanto has never had any interest in finding out whether Roundup is safe,” said their counsel, Brent Wisner.
The jury awarded each of them $1 billion in punitive damages as well as a total of $55 million in compensatory damages.
In a statement, Bayer said it was disappointed with the verdict and would appeal.
It called the jury’s decision ‘excessive and unjustifiable’ adding that both Alva and Alberta Pilliod had histories of illnesses that were known risk factors for non-Hodgkin’s lymphoma.
The company insisted that decades of studies have shown glyphosate and Roundup to be safe for human use.
Glyphosate was developed by Monsanto in the US in the 1970s and has become one of the most widely used ingredients in weedkillers worldwide.
But Bayer now faces more than 13,400 US lawsuits over Roundup’s alleged cancer risk.
In March, a jury in San Francisco awarded $80 million to another Californian man after finding that Roundup had caused his cancer.
Last August, another Californian man was awarded $289 million after a jury also found Roundup caused his cancer.
New York policeman tried five years after black man’s death
Five years after an African-American father of six died after being apparently held in an illegal police chokehold, a video of which triggered the Black Lives Matter Movement, a disciplinary trial of the policeman accused of killing him got underway on Monday in New York.
“I Can’t Breathe! I Can’t Breathe!” Eric Garner cried out with his last breaths as five police officers tried to handcuff him, AFP reported.
This was caught in a video shot by a friend that was viewed around the world.
The 43-year-old, who was unarmed and accused of illegally selling cigarettes, died minutes later. His death, listed as a homicide by the medical examiner, triggered the Black Lives Movement denouncing police violence against unarmed African-American men.
His death in July 2014 was the first of a wave of high-profile, racially charged incidents in the US in which officers have been accused of using unreasonable force or being too quick to fire at black suspects.
For years, New York police held back from proceedings to try Daniel Pantaleo — the officer who appeared to hold Garner in a chokehold — on the grounds that they had to wait until a federal civil rights investigation first ended.
The federal case has yet to produce its conclusions. Although he has been restricted to administrative duties, Pantaleo is still a member of New York police.
Was it intentional?
The police department finally launched its disciplinary proceedings, which led to the trial, set to end May 24.
A dozen protesters gathered in front of police headquarters as the first hearing began, demanding that Pantaleo be fired — the harshest punishment possible.
“It’s been five years. Five years we’ve been on the frontlines trying to get justice and they’re still trying to sweep it under the rug,” Garner’s mother Gwen Carr said on the sidelines of the hearing, referring to the ultimately failed efforts by the policeman’s lawyers to have the hearing scrapped.
“We’ve seen the video, we’ve all seen him being murdered... and they’re still playing games.”
The proceedings aim to determine whether the officer did in fact place Garner in a
chokehold, a technique that the New York Police Department has banned since 1993.
“Right from the get go he went for his neck,” said Jonathan Fogel, a representative of the plaintiffs led by the Civilian Complaint Review Board, an independent body that reviews claims against police.
The video shows Pantaleo apparently holding his forearm against Garner’s throat for a little more than 15 seconds, at one point clasping both his hands to maintain his hold.
“It was intentional,” Fogel said, calling on Rosemarie Maldonado, the deputy commissioner presiding over the trial, to provide ‘some measure of justice’ and hold Pantaleo ‘accountable.’
Pantaleo’s lawyer Stuart London insisted that his client ‘just did his job’ and that ;the result would have been the same if he had not touched his neck at all; since Garner was already in poor health, suffering from asthma and obesity.
London also insisted that Garner only began complaining he could not breathe after Pantaleo let go.
In 2015, Garner’s family reached a settlement with New York, which agreed to pay $5.9 million in damages.
Two seaplanes collided in mid-air on Monday over southeastern Alaska, killing at least four of those aboard, injuring 10 others and leaving two people missing, US Coast Guard and Federal Aviation Administration officials said.