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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.

England's shrinking middle class struggles to hold on

An anxious middle class in the United Kingdom shares many of the same worries that keep the middle class in America up at night.

Britain's modern era of inequality began in 1979 when Margaret Thatcher was elected Prime Minister. Within a decade, Thatcher cut the top rate of income tax in half, from 83 percent to 40 percent. The figure 83 percent is astounding, but it is accurate and it prompted many of Britain's wealthiest people to relocate to low-tax countries like Switzerland and Monaco. Middlesbrough's industrial decline began.

Hills pointed out that the richest 10 percent used the extra money in their pockets not to reinvest in the economy and create jobs, but to buy property and shares. Their income increasingly came from rents and dividends, not work. Money earned that way was taxed as capital gains. That tax rate was just 18 percent. So more of the share of the nation’s wealth went into their pockets, explained Hills.

James Bradley and Jonathan Hudson cleaning the streets of Grangetown, Middlesbrough. Council workers such as these cleaners are called "Clean and Green" teams.
(Seamus Murphy/VII/GlobalPost)

When he became the area's top cop in the early 1990's, Ray Mallon instituted a zero-tolerance policing program. As a result, when you drive around the town you don't see the usual signs of economic decline and urban deprivation. There's no graffiti or smashed-in windows. Litter doesn't line the gutters.

Mallon, who has been mayor since 2002, explained, "It's not something you can see as you drive around. Inequality shows in high crime, low education attainment and poor public health."

Life expectancy is one of the clearest measures of how inequality affects Mallon's community. Recent figures show that the most affluent 10 percent of men in Middlesbrough can expect to live about 15 years longer than the least affluent 10 percent. For women, the figure is 11 years.

As mayor, Mallon has to deal with the human reality of those living on the wrong side of inequality numbers. The effect of 40 years of progressively deeper impoverishment has led to a generational crisis, with a third generation being born into a world of welfare dependency and low aspiration.

"They live for today, they might say tomorrow, but not much further," he said. "They're not even thinking about a job - they're existing. No hope, no aspiration, no ambition."

In nearby Grangetown, in the shadow of what was the ICI chemical plant, grandmother Maureen Aiken agrees with Ray Mallon, but only up to a point.

"There's people round here don't realize what a job's like. Never had one," she said.

Maureen Aiken, 58, in her home in Grangetown, Middlesbrough.
(Seamus Murphy/VII/GlobalPost)

On the surface, Aiken, 58, and her family fit Mallon's description of generational crisis. Grangetown, on the eastern side of the city, is an area where more than 80 percent of children are raised in poverty. Several of Aiken’s grandchildren have been in and out of foster care.

But sitting in her living room, the heat turned off because it is too expensive to run even on the coldest days, she told a story that tracked Britain's decades-long march towards inequality.

Work was plentiful in the early 1970s when Aiken left school at 16 and began her working life. She was 21 when she had her first child, and she had another the following year. When her relationship broke down she returned to York. She never stopped working, although money was often tight.

From 2000 to 2005, the poorest in Britain did relatively better than the wealthiest in gaining a share of the economic pie. The reason was simple: jobs. Unemployment was half of what it is today and taxes on the low paid were light.

Those were golden years for Aiken. She was the chef at the Black Bull Pub in York. She earned a little over £500 a week, good money for that time and in that part of England. She had to give the job up, she said, because her teenage daughters, unsupervised, were getting into trouble. They got pregnant. She stopped working to have time to hold her family together.

There are few jobs in the local area for those like her with limited skills and no college degree, she said. Now she gets by on £567.30 ($914) a month in welfare benefits. But working is what she has always done, so she volunteers when she can at Thrive, a church-based community-organizing group.

She had a question for Ray Mallon: "Where's he going to get the jobs from?" She fired out the question again, emphasizing each word, "Where Is He Going to Get the Jobs!?"

At the other end of the economic scale, life in Middlesbrough is sweet.

The A66 at rush hour was sluggish on a recent afternoon as people headed to places like Yarm and Wynyard and other pleasant old villages snuggling up alongside the North York Moors National Park. Here houses can cost a million pounds and the private schools have long waiting lists.

"Recession? It's a load of bollocks," said Steve Cochrane. "Try booking a top restaurant this Saturday night. You won't get a table."

Cochrane sat in the William Hunt room of Psyche, his high-end clothing emporium downtown. It's thirty-five thousand square feet over three floors packed with Boss, Armani and the Savile Row-based Hunt.

"Middlesbrough's a very disparate place," he smiled. "My customers are very upbeat about the economy."

Cochrane is a local lad made good. A former singer in a punk band, 30 years ago he started selling clothes from a market stall in Redcar, a seaside town 10 miles down the A66. Today his business has a turn over of £5 million a year, and online sales are taking off. He sees upside everywhere.

But when asked to look down the ladder and talk about local inequality, he turned the question into a national one.

"There is inequality in Britain. It's in the North-South divide. There's far too much government investment in London and the Southeast. It's pissing me off more and more," he said.

There is a shocking disparity between London and the northeast. The crash of 2008 led to an 11.31 percent decline in household wealth in Middlesbrough's region. London's average household wealth went up by 17.88 percent during the same period.

The prognosis for reducing inequality in Britain seems poor. The economy is not growing. The day of the council meeting, government officials acknowledged austerity measures would continue for at least five years.

So Mallon continues to make cuts. Gone is £8.9 million ($14.3 million) from the Working Neighbourhoods Fund, a stream of central government revenue designed to help people get back into employment and to acquire and renovate houses for people in need. It's precisely the kind of program that could have helped Maureen Aiken.

The irony is not lost on people here that $14.3 million is just about equal to the bonus paid last year to Bob Diamond, former head of Barclay's Bank. He was forced to resign over the bank's role in the Libor interest rate fixing scandal. Barclay's led the way in fixing the London interbank lending benchmark so its derivatives traders could make money betting on the rate's movements.

”I shake my head in disbelief," said Mallon. "We can't become fixated on this, we can't become paralyzed. We have to go forward."

http://www.globalpost.com/dispatch/news/regions/europe/united-kingdom/130114/middlesbrough-england-UK-shrinking-middle-class