How £21k makes you rich

Conversation is turning to the problem of low wages in the UK and the rising cost of living.  But we also need those who earn more than the majority to understand how well they’re doing. This is especially important when we talk about the affordability of public services and social security, and the payment of taxes. But many have no knowledge of what people in this country earn.

If you earn over £21,198 a year, you earn more than half the workers in this country.  That means that for every two people you pass on the street, it is likely that you are earning more than one of them.

If you earn over £21,198 a year, you earn more than half the workers in this country.  That means that for every two people you pass on the street, it is likely that you are earning more than one of them. Even if we just concentrate on full-time earners, the figure is £26,462.  And for higher rate tax-payers, for every 5 people they come across, they’re probably earning more than 4 of them. We cannot dismiss these statistics as reflecting people at the beginning of their careers who will then work their way up to better paid jobs. Across all age groups, the median wage never comes above £25k. For many, especially in sectors such as retail, social care and hotels/restaurants, low wages are the reality of the job they find themselves in for life. To be better-off is a comparison game.  Just liked best dressed competitions, feelings of wealth are fuelled by comparisons with those around us – hence the keeping-up-with-the-Jonses syndrome. You would think that this underlying desire to check that we’re doing as well – or better – than our neighbour would give us an appreciation of what others earn.  The problem lies with who we compare ourselves to. Often we gravitate towards those who are like ourselves.  If our friends have similar earning power to us, then our situation feels normal.  As long as we keep up with our friends, and with what we see – through T.V., the media, books – as being aspirational (or necessary) to our situation, it is unlikely that we will compare our own wealth to that of the whole population. People who earn less exist, but we probably do not know them. If we’re to have a real conversation about how much public services cost, what is a fair rate of tax, if and how the benefits system should be restructured, then we need to have the facts before us.   That includes being aware of wage rates across the UK. And whilst it is important that we work to push up wages at the bottom end, and that we encourage employers to keep wages rising alongside the cost of living, we should acknowledge relative wealth where we see it. So next time you find yourself in a conversation about earnings, remember the statistics.