Business World

Wednesday 27 August 2014

Rich got richer in UK -- but so too did the lowest paid

Published 08/11/2012 | 05:00

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THERE will be no surprise that top earners in Britain saw their salaries more than double in real terms over the past 25 years.

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That has been the pattern in most of the capitalist world over that period -- not least in Ireland.

There will be more surprise in the finding by the UK's Office for National Statistics that the lowest paid have seen the biggest increase.

Credit is being given to the introduction of a legal minimum wage in 1998. Since then, the bottom 1pc have had a real increase of 51pc, compared with an increase of 30pc for the top 1pc.

Britain's relatively high inflation shows up in the figure that, while the average full-time employee enjoyed a cash increase of 226pc since 1986, the "real" increase in purchasing power was just over 60pc. All of that has stopped since 2007, with the Bank-of-England generated burst of inflation leaving the wages of all groups failing to keep pace with price rises.

Another contrast with Ireland, where those on steady incomes like, ahem, pensioners, saw a real increase since 2008.

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