The UK is a country of stark inequalities, where the richest 10% of the population have more than half of the total wealth, while the poorest 10% have less than 2%. But despite their privileged position, many of the high earners are feeling anxious and insecure about their future. What are the reasons behind their discontent, and what are the implications for the rest of society?
The cost of living in a divided society
One of the main sources of worry for the top 10% earners is the rising cost of living, especially in housing, education and health. Many of them feel that they have to spend a large proportion of their income on these essentials, leaving little room for savings or investments. They also feel that they have to compete with the super-rich, who can afford to buy properties in prime locations, send their children to elite schools and access private health care.
According to a recent report by the Resolution Foundation, a think tank that focuses on living standards, the top 10% earners have seen their disposable income fall by 3% since 2006-07, while the bottom half of earners have seen theirs rise by 9%. The report also found that the top 10% earners have experienced a decline in their wealth share, from 44% in 2006-08 to 39% in 2016-18. This is partly due to the fall in house prices after the financial crisis, which hit the high earners harder than the low earners.
The report suggests that the top 10% earners are feeling the pinch of inequality, as they are squeezed between the super-rich and the rest of society. They are also facing higher taxes and lower public spending, as the government tries to reduce the budget deficit and debt. The report warns that this could lead to a loss of social cohesion and trust, as well as a decline in support for progressive policies that could benefit the majority.
The myths and realities of meritocracy
Another factor that contributes to the dissatisfaction of the top 10% earners is their perception of meritocracy. Many of them believe that they have achieved their status through hard work and talent, and that they deserve their rewards. They also tend to underestimate the role of luck, inheritance and social connections in their success. They often compare themselves with those who are richer or more powerful than them, rather than those who are worse off.
However, this view of meritocracy is challenged by evidence that shows that social mobility in the UK is low and declining. According to a study by the Social Mobility Commission, an independent body that monitors progress on social mobility, only one in eight children from low-income backgrounds is likely to become a high earner as an adult. The study also found that there is a strong correlation between family background and educational attainment, occupational status and income.
The study argues that meritocracy is a myth that masks the structural barriers and inequalities that prevent many people from reaching their potential. It calls for a radical overhaul of the education system, the labour market and the welfare state to create more opportunities and support for those who are disadvantaged by their circumstances.
The consequences of turning away from society
A third factor that affects the well-being of the top 10% earners is their relationship with society. Many of them feel alienated from the rest of society, as they live in segregated neighbourhoods, send their children to private schools and access private services. They also tend to have less contact and empathy with people from different backgrounds and experiences. They often have misperceptions about wider society, such as overestimating the level of welfare spending, unemployment and immigration.
This isolation and detachment can have negative consequences for both themselves and society. For themselves, it can lead to a loss of social capital, which is the network of relationships and trust that can provide support, information and resources. It can also lead to a loss of civic engagement, which is the participation in public affairs and collective action. For society, it can lead to a loss of social cohesion, which is the sense of belonging and solidarity among different groups. It can also lead to a loss of social justice, which is the fair distribution of rights and responsibilities among all members.
The authors of Uncomfortably Off: Why the top 10% of Earners Should Care About Inequality (co-authored by Gerry Mitchell), a book based on interviews with high earners in Britain, argue that this situation is unsustainable and undesirable. They urge the top 10% earners to recognise their interdependence with society, and to take more responsibility for its well-being. They suggest that this would not only benefit society as a whole, but also themselves, as they would enjoy more security, happiness and fulfilment.
