The occupy movements across the world have already succeeded in focussing the debate on the huge disparities between the very wealthy and the “bottom 99%”.
This slogan mainly reflects the immediate anger felt across society to how a crisis that originated in the financial sector is now driving down the majority’s living standards, through the forcing down of real wages and slashing of public services, whilst the profits of the elite appear unaffected.
However the idea of the “bottom 99%” also taps into a longer term development. Under the past 30 years of unrestrained free market capitalism, the gains of growth have overwhelmingly accrued to the top 1%. They have barely trickled down to whole sections of society. As has been pointed out elsewhere, it has been more likely they have trickled up.
As an FT article ‘Top Dogs take bigger slice of spoils’ pointed out: “Between 1976 and 2007 in the US, 58 per cent of the total growth in income was captured by the top 1 per cent. Not only that, but the trend appeared to be accelerating”
Similarly, Citigroup’s research department wrote three controversial memos for investors concluding that wealth in the US was increasingly concentrated.
One paper said:
“There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take. There are the rest, the “non-rich”, the multitudinous many, but only accounting for surprisingly small bites of the national pie..the top 1% of households account for 40% of financial net worth, more than the bottom 95% of households put together”
In Britain, the 2010 report Anatomy of the Economic Inequality in the UK, initiated by Harriet Harman, provided strong evidence that the main fruits of economic growth here too had gone to a tiny handful. It states: “the share of the top 1 per cent in after tax income fell from 12.6 per cent of the total in 1937 to 4.7 per cent by 1979, but rose again to 8 per cent in 1990 and 10 per cent in 2000.”
This concentration of wealth for the top 1% has been at the expense of the rest of society. Median male real US earnings have not risen since 1975. Average real Japanese household incomes after taxation fell in the decade to mid-2000s. Whilst the Resolution Foundation has pointed out that in the UK, the pay of those in the bottom half of the earnings distribution has failed to track headline economic growth and median wages were stagnant from 2003 to 2008 despite GDP growth of 11 per cent, an issue taken up by Ed Miliband’s in his focus on the squeezed middle.
Over the last two decades even at the upper end of the income scale people have not been benefiting from economic growth. As the Anatomy report mentioned above states: “in the 1990s… the top 1 per cent as a whole increased their share from 8 to 10 per cent of the total. But the share of the ‘next 9 per cent’ actually fell. The increase in the shares of top incomes in the 1990s was about those right at the top, not those quite near to it.”
These income trends lead to interesting political conclusions. By making the “bottom 99%” a dividing line in British politics, Labour could reach out to the overwhelming majority of people across all parts of the county and attract a very broad alliance of support . This would transcend the debate about whether Labour should focus on ‘core’ vote or the ‘swing vote’ which so often stifles the internal debate, when of course it should seek to win over both sectors to forge a successful electoral coalition.
At the very least, it would appeal to the 5m voters labour lost between 1997-2010 – the majority whom had faced stagnating incomes. But more than likely it would be attractive to millions more as Labour demonstrated clearly that it was on their side.
In fact, defending the bottom 99% is already at the core of one of Labour’s most popular policies. Labour’s defence of the 50% tax rate for the 1% who earn over £150,000 is backed by 69% of the population according to recent polls. Yet the Tory Chancellor is clearly seeking to prepare the ground to overturn this, aided and abetted by the Tory Mayor of London. Focussing on the bottom 99% could highlight how out of touch the Tories are on other issues too.
In the US, the Occupy Wall St movement is already having an impact in undermining the right, attracting more support than the Tea Party and is even backed by the majority of New Yorkers. In this country, when the governor of the Bank of England has warned that living standards are to plunge at the fastest rate since the 1920s, then maybe Labour as a party of the “bottom 99%” is an idea whose time has come?