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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.
In 2009, Cameron explained in a speech, “According to almost every quality of life indicator … per capita GDP is much less significant for a country's life expectancy, crime levels, literacy and health than the size of the gap between the richest and poorest in the population."
But now critics say Cameron is pursuing policies that can only increase inequality. 660,000 public sector workers have lost their jobs since the government came to power in 2010 - a time when the private sector is mostly creating part-time and low paid work. As Mallon put it, the cuts are "too quick, too deep, too savage."
Middlesbrough lies along the banks of the River Tees just before it flows into the North Sea.
In the hills just south of the city, ironstone was discovered in the mid-19th century. There were vast deposits of coal in the same area. With a ready supply of fuel, soon giant smelters were built to turn the iron into steel.
Teesside became Britain’s industrial powerhouse. Every piece of steel in the Sydney Harbour Bridge was forged in Middlesbrough and shipped to the other side of the world. The ICI chemical factory and the British Steel plant provided full employment. The tangle of massive metal chimneys constantly belching toxic smoke into the lowering clouds reputedly inspired one local boy, film director Ridley Scott, in his designs for Blade Runner.
There may have been environmental issues in Teesside, but 40 years ago life in Middlesbrough was better, according to Mike Hopkins, principal of Middlesbrough's College of Further Education.
"Forty years ago, Teesside was the third most prosperous region in the UK, now Middlesbrough town is the 8th poorest in the UK," Hopkins said.
Hopkins pins the town's decline on British government failures. "Successive governments pursued the wrong policies. Starting in the 80's, the Thatcher government tilted away from manufacturing towards financial services. Then, during the Labour government they emphasized creative industries."
Gesturing out his window, Hopkins lamented the failure to invest in improved infrastructure for manufacturing.
Landscape in the Teesport area of Middlesbrough.
"We've got this giant chemistry set around us. It could have and should have been sustained into transition by the UK government,” he said. “That's what they did in Germany."
Instead, British Steel and ICI no longer exist. They were broken up and parts of them were sold off to private equity firms. There is still steel and chemical manufacturing in Teesside, but these industries employ a fraction of the number of people they used to.
Middlesbrough's recent history perfectly tracks Britain's history of rising inequality. Forty years ago, when Middlesbrough was prosperous, Britain was a much more equal society, as measured by the Gini coefficient.
The Gini Index is a measure for describing wealth inequality. A zero Gini coefficient represents perfect equality. A one on the Gini Index represents one person owning everything. When you get above .330 societies are, by most economists’ assessment, considered to be significantly unequal. The UK has a Gini coefficient of 0.340 and the US figure currently is around .450, according to the CIA World Factbook’s most recent available data. Both the UK and US rank near the bottom of the 34 leading industrialized countries, with the UK at number 25 and the US at number 32 for inequality.
Britain's Gini coefficient was .250 in 1979, according to a 2011 report by the OECD, so income inequality has increased dramatically. To put these numbers into simpler terms, consider this: In 1979, the top one percent of UK earners took home six percent of national income. Today, the top one percent take home 15 percent of national income, according to OECD figures.
How unequal is British society today? Professor John Hills of the London School of Economics, answered the question with another question:
"Do you get Downton Abbey in the US? We are back to Downton Abbey levels of wealth inequality."
In 1918, when the denizens of Downton were celebrating victory in WWI, the top 10 percent of rich Britons brought home 37 percent of national income. Today that figure is at 40 percent. But in between were decades when wealth inequality contracted, starting with World War II. Throughout these decades, greater equality created a solid middle class.