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Income inequality is surging, and there are few countries where it is rising faster than the United States. The distance between rich and poor is greater in America than nearly all other developed countries, making the US a leader in a trend that economists warn has dire consequences. GlobalPost sets out on a reporting journey to get at the ‘ground truth’ of inequality through the lenses of education, race, immigration, health care, government, labor and natural resources. The hope is to hold a mirror up to the US to see how it compares to countries around the world.
An anxious middle class in the United Kingdom shares many of the same worries that keep the middle class in America up at night.
Comparing the Divide: Middlesbrough, England and Sheboygan, Wisconsin both built thriving middle classes over decades of successful manufacturing. In the United Kingdom, income inequality is climbing and threatens to return places like Middlesbrough to an Dickensian age of "haves" and "have-nots." Sheboygan, with an income inequality level slightly higher than England's, is proving resilient to a similar trend of middle class erosion across the United States.
MIDDLESBROUGH, England — "Born of Iron, Made of Steel."
That inscription is carved into the gates at the site of an old iron works here in this provincial seat of 138,000 in northeastern England.
South Tees Industrial Park is a government-subsidized technology and light-industry development. It employs far fewer people than the old steel works did when this town represented a muscular and growing middle class in England that was forged out of the fires of World War II and tempered by the decades of rebuilding and growth that came after.
Today, the residents of Middlesbrough are part of an anxious and withering middle class in the United Kingdom that shares many of the same worries that keep the middle class in America up at night.
“We have some serious, serious times to come.”~Ray Mallon, Mayor of Middlesbrough
On a cold, winter's evening in the courtyard of Middlesbrough Town Hall, anxiety was in the air. The local council was preparing to discuss national government spending cuts and their impact on the municipal budget. Businesses and citizens rely on this government support. It is what holds this place together.
Outside, in the below-freezing temperatures, a small knot of workers from Ayresome Industries were demonstrating against the cuts, their faces framed against the darkness by the lights of a local television crew. Their tiny company, which for almost 90 years has provided jobs to disabled workers, was slated to lose its council funding as part of a national austerity plan. Ayresome's 38 people, who manufacture window frames and industrial brushes, stand to lose their jobs, and given their disabilities and the fact that they live in one of the UK's highest areas of unemployment, they are unlikely to ever work again.
Scenes like this are being played out in town halls around England and Wales. The UK has a budget deficit. The Conservative-led coalition government wants to shrink it via austerity spending cuts.
The result is demonstrations like this, people desperately trying to cling to the lifeboat of work in one of the more unequal countries in the developed world. According to the most recent figures from the Organization for Economic Cooperation and Development (OECD), Britain is more unequal than three-quarters of leading industrialized nations.
To put the age of growing inequality in context, consider that the amount of annual subsidy Ayresome received from the council was around £400,000 ($646,000). That sustained nearly 40 jobs, while the average Goldman Sachs' bonus from last year was about $400,000, according to the Guardian newspaper’s business page.
Middlesbrough's mayor, Ray Mallon, arrived at the scene. A colorful local police chief before taking up politics, Mallon listened to the workers, expressed sympathy, then headed up to the council chamber to deliver a report on the cuts he was proposing to the budget.
Mayor Ray Mallon in the Civic Center in central Middlesbrough, where he has offices.
Mallon told the council that in the two years since the government came into office, "We have made £28 million worth of budget reductions, which included 450 job losses."
Middlesbrough is particularly vulnerable to austerity cuts. More than one third of the town's jobs are in the public sector. And the worst of the austerity measures is apparently not over.
Mallon warned, "We have some serious, serious times to come."
Cuts are coming from every direction as the Conservatives seek to shrink the size of Britain's welfare state. But how can that help a town where, Mallon pointed out, "Two-thirds of welfare recipients in Middlesbrough have jobs. They are working."
It’s just that they don't earn enough to get by without help from the government. Take that little bit of subsidy away and the people are left wondering and worrying. Where would Middlesbrough be then?
Mallon is not a leftist. He is a combative Independent. He is all for deficit reduction and breaking the cycle of welfare dependency. He reminded a reporter that he used to share platforms with British Prime Minister David Cameron, back in the day. That was when Cameron was seeking office and said, "More unequal countries do worse according to every social indicator," noting that he wanted to see a Britain that was "more equal."