Wealth inequality *did* increase in the UK in the most recent period
In 2009 the ONS stated:
“In 2006/08, the wealthiest 10 per cent of households were 2.4 times wealthier than the second wealthiest 10 per cent, and 4.8 times wealthier than the bottom 50 per cent (the bottom five deciles combined).
In 20010/2012 the wealthiest households were 4.8 times wealthier than the bottom 50 per cent, again. Does this mean that in the meantime inequality, measured in this way, did not increase? No, as the ONS revised the pension wealth data (look here). When we compare the revised data it clearly shows that inequality did increase in the UK between 2006/2008 and 2010/2012, despite the temporary decline directly after the Great Financial Crisis.
When we, following Chris Giles, estimate inequality by calculating the amount of total assets owned by the richest 10% we however do not see a rise in equality. This share is very stable at 44% (after correction for the changed discount factor which means that Giles was wrong to use this information as an argument against Piketty, as this information was published May 15, i.e. after Piketty’s book was published). Looking at the details it however shows that this is caused by an increase in pension wealth of the 6th-9th deciles and decreases of pension wealth of the upper decile and the lowest four deciles: the middle class gained (according to the ONS calculations, which discounts assumed future flows of defined benefits with an assumed discount factor; as far as I’m concerned the phrase ‘defined’ is in the case of pensions not too well-defined). Inequality between the top and the bottom did increase.
Well, a lot of statistical nitpicking – but that’s what I was trained to do.