There are numerous reports on how the average wage has varied in the UK over the last 25 years. Let’s take a look at the following infographic:
Source: Thisismoney
The above infographic shows us how wage increases have varied by percentile of earners over the last 25 years. The graph essentially shows that top earners pay has proportionately increased more over the last quarter-century than lower earners. What make’s this statistic even more shocking is when we calculate the buffer between rich and poor:
| Year | Bottom 10% | Average | Top 10% |
|---|---|---|---|
| 1986 | £4.80 | £7.78 | £14.78 |
| 2011 | £7.01 | £12.62 | £26.75 |
| Increase | 47% | 62% | 81% |
The Rich’s pay has risen an average of 81% over the last 25 years whereas the poor has risen only 47%. Furthermore, the top 1% of earners have experience pay rises of over 117%!!! Is it any wonder that there is such a divide between the classes?
These statistics are a shocking revelation of what has gone wrong with the economy. The rich have been getting richer, while the poor have essentially been getting poorer. Senior executive’s salaries are at an all time high and the minimum wage is barely enough to survive on – prompting a revolution of the ‘living wage’ – a proposed salary of £7.45 p/h (£8.55 in London).
The thing that infuriates me the most is the companies which have identified these vulnerable group of individuals – those living from one paycheck to the next – and targeted them in offering payday loans or expensive debt consolidation plans. Instead of speaking to Citizen Advice Bureau (CAB) or seeking debt advice from payplan (an organisation funded by donations from the credit industry which offers free and impartial debt advice), people are drawn in by the catchy adverts and sign up to a new agreement which offers temporary relief… only to make their overall situations much, much worse.
Talk to Someone..
If you are reading this blog and can relate to the above situation; please, please don’t sign up for a temporary ‘payday’ loan. This will very likely only make your situation much worse in the long run. Debt management plans, IVAs (Individual Voluntary Agreements) and Trust Deeds (in Scotland) are all better options which are available. Furthermore, credit card companies, banks, utility providers, councils etc. all have systems in place to help those who are experiencing difficulties in paying bills. These companies are not telepathic – you need to let them know that you are going through a tough time. There is no need to feel embarrassed about taking this step – thousands of others are in the exact same situation as you are. Take action before action is taken upon you.
Avoid the Situation Completely
All of the above comes down to planning. If you are in-tune with your finances and plan ahead, you can be prepared for these unfortunate situations that could arise. While an emergency fund is a great start, the opposite end of the spectrum is being ignorantly unaware of where the cash for the next bill is coming from. Make a spread sheet, open your letters and speak to companies. Ask them for a discount / downgrade in service (TV, Phoneline, internet etc.) for a while. Gym’s can often let you freeze membership which may tide you through a tough time. All of these options come first. Take responsibility and stop blaming others for your misfortune. There are people and systems to help you, so please take advantage of them.
Do you have any family/friends/colleagues who are totally irresponsible with money? What advice (if any) have you offered?
This post was featured on the Mo Money Mo Houses, thank you!
Those stats are pretty incredible. I suspect that so long as the divide continues to widen, there will only be more and more unrest among the population.
Glen @ Monster Piggy Bank recently posted..Buying Land and Building a House – Part 1
I totally agree.. unfortunately this shows no sign of happening
Interesting stats. I know financially irresponsible people but have given up trying to help them a long time ago. You can’t change people if they don’t want to change.
Pauline recently posted..Earn money while traveling? (part 2)
So true Pauline… Wanting to change (or seeing the benefit in changing) is the hardest part!
That’s interesting information. Living wages are tricky, because it is really difficult to actually improve the purchasing power of small wages. Most people who earn low wages spend their earnings on things that employ low wage workers, where the costs have gone up because of the increased labour costs. For example, they tend to buy groceries, alcohol, restaurant/bar food and pay rent. Usually, they are sold by low wage workers. So – pub costs go up, I can afford it but go less, decreasing demand, and my friends who have very low wages basically tread water. This is what has happened where I live over the past year with minimum wage increases.
Anne @ Unique Gifter recently posted..Gift Giveaway: iPad Mini and Cash!
Very good point Anne. It is like the lower earners get stuck in a rut that it is impossible to break free from 🙁
Wow, those are some shocking, but not surprising, stats. It really does not surprise me as the gulf between the haves and have nots continues to widen. I agree in regards to the pay day loans. I would have to be VERY hard up for money and would probably be one of my last resorts.
John S @ Frugal Rules recently posted..October Blog Goals Update
I don’t think I would ever take one… I think voluntary bankruptcy is a better option to be honest!
This is exactly how it is in America. Minimum wage workers have to supplement their wages with welfare. Yet, the CEOS and top earners of our country are making obsene amounts of money every year…..and its getting worse.
Holly@ClubThrifty recently posted..“Best of Craigslist” – November 2012 Edition
It is a sad state of affairs… I think Mandy explains it well
Very revealing stats here. When you are wealthy you have MANY more resources than poorer folks and it’s just natural that over time their wages will increase. Especially if you factor in things like fast food; the wages aren’t going to rise much, probably not even on pace with inflation. The skill doesn’t really become more in demand, nor does there become a short supply. It’s not extremely surprising to see these stats, but revealing because we don’t often think about them.
DC @ Young Adult Money recently posted..7 Home Upgrades I Want…Someday 😉
Agreed. I think this emphasises the need for a passive income. For many, it is thee only way to break out
I know many people who spend themselves into a debt hole. I’ve also tried to help yet they are unwilling to give-up anything ex: cell phones with data plans, etc to help the situation. Like Pauline says people need to help themselves…
Canadianbudgetbinder recently posted..Make The Most Out Of Black Friday Deals Without Crossing the Border
That’s why we are all here to help 🙂
Great post! A decade ago they started forcing publicly traded companies to disclose the salaries of the CEO’s. They thought this would humble them to lower their salaries. The opposite actually occurred, because everyone wanted more then the next guy.
Mandy @ MoneyMasterMom recently posted..The Big Cook
Mandy… I think your comment is excellent. You are spot on. It opened the floor into a massive competition. Banks compete, other industries are forced to compete to retain staff. It all turns into getting one-up on others. Do they really need this money? I think not
Yes, seek out Citizens Advice or the Debt Advisory Council – not payday loans! Those loan firms prey on the most vulnerable and sadly seem to be growing in number. Surely time for some legislation to govern them better?
Skint in the City recently posted..Washing Vintage Clothes – A Cautionary Tale and Some Tips