Wednesday, 13 May 2015

It's the Rrich What Gets the Pleasure....

Cameron is supposed to have appointed his cabinet, but Hay's dad was complaining he'd yet to hear who is running the Colonial Office, the Ministry of Food or indeed the Ministry of Information.

Last night we had some walkers turn up on our doorstep at 8pm asking if they could camp in our field. They're doing a sponsored walk from Cardiff to London in aid of some mental health charities and I was surprised to find from Google Maps we're slap-bang on the route.

Yesterday I was thinking about inequality - the reason being that No.1 Son did his AS Level Economics exam on Monday and had been asking me all manner of silly questions that made me think.

The common mantra of the left is that the rich are getting richer and the poor are getting poorer, and I wanted to see if this is true. I started off by thinking back some 100 years, when even middle class people had maids and domestic servants. Few, if any, middle income people retain staff these days - good staff are so hard to come by, don't you find....

In the 1800s, some 10 to 14% of the British population was engaged in domestic service. These days it's a luxury item reserved for only the very wealthy - 0.3% of the population is engaged in domestic service today. Or so I thought.

When you think about it, domestic service has been compartmentalised and outsourced.
  • We go out to eat, having other people cook our dinners,
  • Some people send their laundry out to be washed or dry cleaned,
  • Some people have a gardener come once a week or fortnight,
  • Tesco and their ilk will even do your grocery shopping for you,
  • Many have a woman who does, doing it once a week,
  • Childcare is performed by 3rd parties.
There are so many instances of us having domestic help, but sharing it out and no longer having to house our staff.

That said, the domestic service figure for Germany is 0.7% and for the USA it's 0.6% - double the UK figure - although it's only 0.005% in Sweden. In Brazil, apparently, it's not unusual for a teacher to have one or even two servants.

Domestic servants are not necessarily highly skilled and can be said to be at the low end of the pay scale, yet very few can afford to hire a dedicated body on a minimum wage.

At the other end of the scale, rich people (and I mean very rich) can simultaneously lose half their worth in a single market downturn, leading to a large drop in inequality,

The chart below shows the UK inequality index (using a variety of metrics - Gini and percentiles) since 1961 (BHC means before housing costs and AHC means....well, you guessed it):

As you can see, inequality jumped in the 1980s with Thatcherism, deregulation and the free market, and again under the last years of the Blair government, but curiously it has reduced since the 2010 election on all scales of measurement. The 2009 crash probably had much to do with that and fortunes being wiped out at a stroke.

Now the left may go on about the use of food banks increasing, but food banks are a relatively new innovation, and if you provide a service then people are going to use it, and as more people get to hear of it, even more people will use it. Therefore using food banks as an argument for an increase in inequality is somewhat disingenuous. My own theory is that the increasing use of food banks also has a lot to do with a creaking social security system whereby social security payments are delayed, and not an actual rise in inequality. At least that's what people who frequent food banks or deal with people on the poverty line seem to be saying.

However, having said all the above, the drop in the percentage of people being employed in domestic service had a lot to do with the advent of domestic appliances, which freed up women to enter the workforce.

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