We’re often told that the UK is one of the most unequal countries in Europe. We’re also often told that this is bad, very bad, and something must be done. We’ve pointed out a number of times that there’s another difference in the UK economy, something that makes us rather different from other European economies. And that’s the massive importance of London in our economy. In the latest release of figures from the ONS we can see this quite clearly too:
The UK’s highest earners live in Wandsworth, Westminster, and Richmond upon Thames – all in London.
The weekly wage of the average worker in those areas was £660.90, £655.70 and £655 respectively in April 2014.
At the other end of the spectrum, the average weekly earnings of someone in West Somerset were just £287.30.
The ONS prefers to use the median as its measure of average earnings “as it is less affected by a relatively small number of very high earners and the skewed distribution of earnings”.
Because we’re using the median we’re not just recording those bankers in the City there. This is the number which 50% of the people earn more than and 50% less than in each area. And a goodly part of that recorded UK inequality is because of these regional differences in income.
It’s also true that living costs vary wildly across the country. Most especially housing costs of course although that’s not all. London prices for a pint would choke a fellow from West Somerset just as much as rents or house prices would do.
Given that this is all so then actual inequality is rather lower than we’re always told it it. For, of course, we should, if we’re going to be concerned about inequality at all, be concerned about inequality of consumption. And if people in one part of the country have higher wages but also face higher living costs then that’s an inequality that shouldn’t be concerning us.
In no other European country is the capital such a dominant force or influence in the economy,. Thus our inequality is different from their: and arguably our inequality is lower than it is elsewhere, given this specific difference.