Life is hard living on £120k a year.

We send our kids to the local state school. Does that mean we don’t value their education?

It’s a fact. Working class parents love their kids less than middle class ones. They also beat them and lock them in cupboards to instill discipline instead of using some tv-guru inspired attachment parenting technique.[/quote]

It gets worse: the school only got a 2 in its last Ofsted inspection and we haven’t moved house to get them into an outstanding school. I’m waiting for social services to call.

mboy – Member

Well ok that is being over the top, but part of Blair’s goal for Britain was to get as many kids as possible through a university degree. Which of course only devalued the education system and drove the cost of doing a degree through the roof, rendering everything pointless!

It’s actually a myth, this- the rise in degrees has been pretty much constant since the early 90s, it’s definitely not a Blair thing or even a Labour thing. (the highest spikes in UG numbers all came under Tory governments but that’s probably more or less coincidental- tons of factors go into this stuff)

As for devaluation, the forecast is that on average you’ll earn £150000 more over your life as a university graduate than as a school graduate, and you’re about half as likely to be unemployed. So it’s pretty good.

(further ed actually gives higher employability than a UG degree on average, once you get past the lowest levels. But you need to get up to the higher end before you start to see earnings match)

I bet you’ve bought a massive telly too, haven’t you? And watch the footy on Sky? Apparently this is the greatest crime you can possibly commit, you woking class oik!! Worse than kiddy-fiddling

jambalaya – Member

@Northwind – this view that the 1% make their money off the labours of the 99% is ideological not factual viewpoint, it isn’t reality. A lot of people join a business with the hope of being promoted, maybe one day being the CEO.

No, it is a mathematical fact- the only thing that can sustain the highest wages is the work of a much larger group of people. Whether people aspire to be in the 1% is irrelevant to that.

the forecast is that on average you’ll earn £150000 more over your life as a university graduate

Historically I can believe that, but as degrees become universal and therefore devalued as a differentiator, I can’t see the earning premium doing anything other than falling….

It’s a fact. Working class parents love their kids less than middle class ones.

I doubt it, but it may be the case that, however much they love their kids, working class parents are less aware of the value of education, are less able to provide role models for education, and may be less able to optimise their childrens education by helping with homework, moving to a better school catchment area, paying for additional private services etc.

you woking class oik!

Yeah Woking isn’t the greatest place – in Surrey anyway.

No, it is a mathematical fact- the only thing that can sustain the highest wages is the work of a much larger group of people. Whether people aspire to be in the 1% is irrelevant to that

I don’t agree at all. You can have a business where all the employees are in the top 1% of earners nationally. They are not earning their money off the 99% who don’t work for the company. Most people who start out in their working life aspire to improve their position or skills, they aspire to be in the top 50%, 25%, 10%, 5% 1% etc

What you are quoting is old Marxist dogma that the rich only get rich because they underpay the poor for their efforts.

Historically I can believe that, but as degrees become universal and therefore devalued as a differentiator, I can’t see the earning premium doing anything other than falling….

@footflaps for me the way to think about this is that you are competing globally, by having a more broadly educated population you are trying to move the country as a whole up the value chain. It’s interesting that China is now losing jobs to lower wage cost countries (like Vietnam). If you don’t upscale your skillset then the risk is you have no employment or only that a wage level which is competitive with very low cost countries.

It’s a fact. Working class parents love their kids less than middle class ones. They also beat them and lock them in cupboards to instill discipline instead of using some tv-guru inspired attachment parenting technique.

Surely it’s the other way round? Tv parenting technique on the estates, fagging and beatings in the boarding schools?

…. and the award for the most patronising, pompous post ever typed onto STW (and possibly the whole interwebz) goes to…..

😆

samuri – Member

Absolute bobbins. The majority of tax comes from the real middle income earners, £20,000 to £50,000

@Samuri, yes of course the majority 99% pay the majority of the tax ie 75% of the total but the top 1% pay 25% of the tax a hugely disproportionate amount as @mashiehood’s chart shows. Think of how much extra the 99% would have to pay, they would have to pay close to 30% more in tax each to cover the loss of the 1%. What his chart also shows is that raising taxes beyond a certain point leads to a fall in tax revenue, we saw this a number of times in the past and we saw it again when taxes went to 50% (as the chart shows). When the tax rate was dropped from 50 to 45 tax revenue went up.

Sorry if I don’t believe a chart published in a newspaper.

Look at the actual HMRC stats and the real figure is less than 10% I think. I don’t have time now but IIRC the Institute for Fiscal Studies issued a paper on this a year or so ago largely in response to high earners claiming they supported the entire country.

I think these numbers are right, £200k pa puts you in the top 1%

So the top 1% is a very wide band of incomes from £200k to £2 billion (and more). Clearly someone having an income at £20m pa would be considered pretty rich by most of us but £200k ?

The 99% a less wide band but still, is someone on £175k part of the downtrodden ? Or a couple each earning £100k, they are individually in the 99% but together they are the 1%

Another factor is that if you do reduce the gap between the highest earners and the average you must increases tax rates on the average as I posted earlier. That’s the biggest practical issue with a flat tax rate as in the UK it would have to be in the high mid 30’s %

What you are quoting is old Marxist dogma that the rich only get rich because they underpay the poor for their efforts.

It’s not the only reason but you do have to consider why over the last 30 or more years at the top wages have increased massively while those on lower incomes have had virtually no real terms improvement. The only reason these people have seen improvements in living standards is through technology and credit.

Samuri as ever a voice of reason
– the 1% pay 25% of the total tax 😆
oh their tax accountants would’ve been fired if they had to pay that much OR they are avoiding paying earning so much that we should have a great NHS, excellent state education and fantastic roads if they paid the correct amount.

@footflaps for me the way to think about this is that you are competing globally,

But competing on ability, not on qualifications… The ability bit is fairly unchanged by having a piece of paper from an ex-poly saying “BSc” on it….

Anecdotal I know, but I went back to my Uni about 7 years after graduating and popped into my old department to chat to my lecturers. In that time they had had to drop the entire 3rd year (of my degree) and spent year 1 doing A level revision and years 2 & 3 just doing my 1st and 2nd year course, as the quality of undergraduates had dropped so much (although the numbers were up). You’d still get the same qualification, BEng, but had studied a lot less to get it. Hence most employers now insist on 4 year MEngs. Devaluation at work.

@samuri I am enough of an anorak to look at IFS and HMRC data, I have it downloaded on my computer at home as a matter of fact. The top 1% don’t support the country as such as they pay “only” 25% of the taxes but without them taxes on everyone else would be 30% higher.

I can tell you personally that when tax rates went to 50% more than a dozen high earners I know left the country (people earning £1m+) transferring their jobs abroad. Also everyone at that tax rate made sure they maximised all legitimate tax shelters (like pensions). Overall this group paid much less to HMRC than they did at 40% rate, a rate people felt was fair and it was better to have the money in their pocket to spend.

I appreciate your cynasism regarding charts in the press but they reflect the world as I see it on this issue.

oh their tax accountants would’ve been fired if they had to pay that much OR they are avoiding paying earning so much that we should have a great NHS, excellent state education and fantastic roads if they paid the correct amount.

I suspect that’s more like it. They’d pay 25% of the tax bill, *if* they paid the appropriate amount of tax on all their income. Which of course, rich people don’t do.

I can tell you personally that when tax rates went to 50% more than a dozen high earners I know left the country (people earning £1m+) transferring their jobs abroad.

All the studies of this ‘mass exodus’ failed to find any significant numbers of people who left…

@jambalaya

Samurai cant hear you….. 😀

Samurai – if you have the time, read this

Perhaps, but studies have also showed that tax revenue decreases above a certain tax rate. It’s called Tax Income Elasticity (TIE) and we get into lovely economists’s speak with income and substitution effects. Irrespective of the mass exodus stories, TIE is proven and quantified – the only debate comes in determining the exact number! But that’s economics for you….not an exact science despite the over use of maths to try and suggest otherwise!

footflaps – what are the studies you refer to?

@jambalaya – I think your findings reflect my guesswork then. I’m largely cynical about these things not because I resent high earners, I earn a good wage myself, but because we all recognise that the richer you get, the less likely you are going to follow the absolute line in tax payment. Rich people are far more likely to have access to resources that allow them the avoid tax.

I would even hazard another guess that you can almost guarantee that up to a certain wage limit, people just pay all the tax they have to, beyond that limit (no idea what it might be), people are increasingly less likely to just pay the appropriate level of tax without looking to avoid it in some way.

footflaps – what are the studies you refer to?

You’d have to google but I did read a few articles at the time on the subject in the Guardian, as the ‘mass exodus’ was a headline in the tabloids. But, no one who looked in to it could find any significant numbers who quit the UK from the City over it.

I would argue he is an ordinary person. Ordinary people are earning a lot more than they used to 20 years ago. A mid ranking compliance officer isn’t a senior person. He’s not a high flier and he wouldn’t describe himself as such I am sure.

The average salary is around £25k, not £120k. £120k puts you into a rarefied salary bracket, and is very much a senior position, however one chooses to self-describe.

My point was that wages at the top end of the market have risen much faster than the average. Why?

@mashie – Sorry, have to go in a minute but are ‘tax liabilities’ not exactly what saying? A ‘tax liability’ is how much we would expect someone to pay if they followed the line in tax payment? That’s different to ‘actual tax paid’.

My point was that wages at the top end of the market have risen much faster than the average. Why?

Simply not true. Look at the official stats. The biggest increases are at the bottom. I know that is not what the headlines pretend, but the stats are there. I have linked them many times.

@footflaps – As we are talking of the 1% you need relatively few people to go to have an impact. Would the government be able to detect that, I don’t know but I could give a few examples and have posed them here in the distant past.

@samuri – IMO your last point is true to some regard, many small businessmen and tradesmen are doing jobs for cash etc. However, I would wager they dodge as much if not more tax in absolute terms than the 1%. This is one reason some people favour sales tax, as it’s harder to avoid, the downside being that it impacts the less well off more directly (mitigated by no vat on food or rent for example)

thm – thats frankly cobblers, I’m afraid.

It may be the case over the last year or two. But if you take overall stats since the minimum wage was introduced in 1998, if rises had kept pace with average boardroom pay rises in FTSE 100 companies, it would now stand at over 20 quid an hour. Its actually £6.15

The overall trend for the last 20 years has been for hugely disproportionate rises at the top. The fact that that has slowed slightly hardly means we’ve turned into some type of meritocracy. Far from it!

It’s a fact. Working class parents love their kids less than middle class ones.

I doubt it, but it may be the case that, however much they love their kids, working class parents are less aware of the value of education, are less able to provide role models for education, and may be less able to optimise their childrens education by helping with homework, moving to a better school catchment area, paying for additional private services etc.[/quote]

We’ve only done one of “helping with homework, moving to a better school catchment area, paying for additional private services”. Does that mean we don’t value education or not?

Ok Binners, I will stop using official figures. That’s the pain of being an economist, you tend to start with them first!

(Your secondary point is largely true though)

Link to those stats?

iirc, the stats for the bottom 1% have been improved by government intervention with minimum wage and tax benefits, but the bigger picture shows an improving % increase as you move up the pay scale.

but it may be the case that, however much they love their kids, working class parents are less aware of the value of education, are less able to provide role models for education, and may be less able to optimise their childrens education by helping with homework, moving to a better school catchment area, paying for additional private services etc.

Either my sarcasm radar has completely failed or that’s one of the most disturbing and laughable posts I’ve ever read on here.

I think we’ve just been given a terrifying insight into a very deeply disturbed mind. I can only presume he works for a Tory Thinktank 😆

No point MSP, apparently it’s all cobblers.

(Easy to google if you think otherwise though ie that the facts are important.)

The role of parents in determining academic (and other) success is very well documented and hardly restricted to a specific political persuasion.

Either my sarcasm radar has completely failed or that’s one of the most disturbing and laughable posts I’ve ever read on here.

I’d say it was fairly true, and one of the contributing factors to the lack of social mobility we see in the UK. If there wasn’t something ‘special’ which meant middle class kids weren’t more likely to get middle class jobs, than working class kids, we would see much more social mobility.

FTSE 100 Chief Executives by definition are only 100 people so they aren’t necessarily statistically representative of high earners as a whole. Unfortunately, we seem to have inherited the cult of the CE0 from the US. I think this is a grave shame as it often means that when a new one is appointed, many of the guys who missed out leave the company. I am not convinced this is the best model and feel a primus inter pares model would be better.

@footflaps Excuse the amateur phycology but middle income (I’m not going to use the word class) families will tend to encourage their kids in to middle (or high) income jobs, they will have the skills and experience to do so.

@samuri, the 1% pay 25% are actual stats based upon taxes paid not due or dodged.

Simply not true. Look at the official stats. The biggest increases are at the bottom. I know that is not what the headlines pretend, but the stats are there. I have linked them many times.

I just have. Income inequality is much higher now than it was thirty years ago. The poorest decile has a smaller share of total income, and the richest decile has a larger share.

True but look at what has happens in recent years (ignore the change of government though, that’s more of an ironic coincidence, or is it?)

The same LT trends has occurred globally across very different economic and poltical models.