People in their twenties have been the worst affected by the economic crisis despite higher qualifications than any earlier generation, according to a comprehensive LSE analysis of what has happened to inequalities in qualifications, employment, pay, incomes and wealth since 2007.
The research, led by Professor John Hills, shows that those in their twenties and early thirties have been hardest hit by far than any other group, with the greatest drop in full-time employment, largest rises in unemployment, and greatest falls in real wages.
While wealth rose for households aged over 65 between 2006-08 and 2010-12, it fell for younger ones. By 2010-12, median total wealth for households aged 55-64 had grown to £425,000, including pensions, but had fallen to £60,000 for those aged 25-34. To bridge the £365,000 gap would require young households to save or make pension contributions of £33 for every day for thirty years.
An eight page summary of the report is also available.
Further detailed tables and breakdowns, and an interactive web-tool for their analysis will be available on www.casedata.org.uk
The paper - and a more detailed examination of inequalities in London published at the same time - is part of CASE's research programme Social Policy in a Cold Climate (SPCC), funded by the Joseph Rowntree Foundation, the Nuffield Foundation, and Trust for London. The views expressed are those of the authors and not necessarily those of the funders.
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New analysis by CASE academics shows that the capital's economic success and relative resilience following the crash has not translated into lower inequality for Londoners.
The report, The Changing Anatomy of Economic Inequality in London (2007-13), funded by independent charity Trust for London, looks at changes in economic inequality during and in the aftermath of the recession (2007-2013). It uses the latest data available, which can be analysed by a range of characteristics including gender, ethnicity and disability status.
Incomes fall for most Londoners
Between 2007/8 and 2012/13 median incomes for Londoners fell by 3 per cent before housing costs and by 11% when housing costs are taken into account).
The poorest Londoners were worse off than their counterparts in the rest of the UK. In 2012/13 the poorest 10% of Londoners had a weekly household income of £112 after housing costs versus £161 nationally. (Figures adjusted for household size).
Increasing income inequality
Incomes of the poorest 10% of Londoners living in privately rented accommodation in 2012/13 were as much as 53% lower in real terms after housing costs than their equivalents in 2007/8.
London's very wealthiest get wealthier
In terms of physical, financial and property wealth, London residents in the bottom third of the distribution (30% of Londoners) were not as rich in 2010/12 as their counterparts in the rest of the UK. Those near the top of the wealth distribution were not only richer than their counterparts elsewhere, but also 26% wealthier than in 2006/8.
When pension wealth is included, one in ten London households owned total wealth worth more than £1 million in 2010/12.
Disabled people hard hit
Best estimates suggest that in London in 2007/08 the poorest 10% of individuals who experience a limiting-longstanding illness or disability had a weekly after housing costs income of less than £141. By 2012/13, best estimates suggest that this figure had fallen to £100. This is an apparent fall of around 29% (£41 a week) - double the equivalent figure for Londoners without disabilities and more pronounced than elsewhere in the UK .
Low pay and unemployment
The proportion of London workers who were paid less than the London Living Wage (LLW) increased substantially from 17% to 23% from 2007/8 to 2012/13. 18% of male workers and 27% of female workers earned below the LLW. The ethnic groups most strongly affected by low pay included Bangladeshi (47% paid below LLW), Pakistani (44% paid below LLW) and Black, African, Caribbean or Black British workers (31% paid below LLW).
Unemployment grew less rapidly in London than elsewhere between 2007/8 and 2012/13 (by 2%) but started from a higher level.
The capital moved further ahead of the rest of the England on educational qualifications. Four out of ten (42%) of Londoners had a degree in 2012/13 compared with 24% elsewhere.
A summary of the report is available online.
The full report is available to download
The report is part of CASE's research programme Social Policy in a Cold Climate (SPCC), funded by the Joseph Rowntree Foundation, the Nuffield Foundation, and London specific analysis by Trust for London. The views expressed are those of the authors and not necessarily those of the funders.
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