Speaking at a recent TASC event, Ged Nash, Labour’s frontbench spokesperson on finance, public expenditure and reform, urged progressives to use the flection point created by the pandemic to find their voices. In this blog, Marcos Gonzalez Hernando and Gerry Mitchell outline why progressive politics should focus on the top 10% of income earners and set out how they could. It draws on the results of a report TASC recently produced in collaboration with FEPS (EU), Compass (UK), Fundación Alternativas (Spain), and Arena Idé (Sweden).
In the last few decades, both in Ireland and elsewhere, we have seen the gap between the haves and the have nots continue to grow. Much has been written (by TASC and many others) on the effects of inequality on the bottom of the distribution. The billionaires at the very top have also garnered their share of attention. Less, however, has been written about the top 10% of the income distribution, those near the top but not quite there.
Even so, why focus on one of the most privileged segments of society that, almost by definition, should be doing well?
One reason is that the top 10% includes managerial and professional elites who tend to have a louder voice in the public debate. Previous research in the US has shown that their preferences are likely to coincide with actual policy and that while they tend to lean right on the economy, their outlook is liberal on issues such as immigration, abortion, and same-sex marriage. Meritocracy, the value of education and hard work dominate their discourses and they tend to have a more negative view of welfare and taxation than the rest of the population.
They are, nevertheless, a heterogeneous group. To qualify for the top 10% as a single earner in Ireland, you need to earn above €60.000 p.a., but to be part of the top 1% you need over €160.000 p.a.. Arguably, the bottom of the top 10% is much closer to the median earner than to the top 1%. And this distance is only growing, partly because, as Piketty famously highlighted, an important part of the income of the top 1% comes from wealth rather than wages.
Maybe because of these inequalities at the very top, most of the top 10% don’t consider themselves rich. Indeed, in Ireland, 28% of them declare facing at least some difficulty in making ends meet. Complaining about the low quality of public services and high cost of living, with memories of the last economic crisis still fresh, they are all too aware of the vulnerabilities of the Irish economy. As one interviewee told us:
We are in the top 10% bracket. But when we looked it up, we thought ‘this is ridiculous. How are we in the top 10%? If we lose our jobs, [we] easily revert to being poor. Who would take care of us?’
Despite being politically influential, the top 10% don’t feel it. In fact, they describe being alienated from the main political parties. As their identity is mostly defined through work – they compare themselves to people around or above their pay-grade – they also find themselves isolated from their local communities.
However, Covid-19 has made this group more receptive to a politics that acknowledges the fragility of an economic system producing more inequality and polarisation. With more of the top 10% having experienced state support (perhaps for the first time), more working at home, more men engaged in childcare and more focus on ethnic and educational inequalities, important changes of attitude are now possible.
How then can progressive parties become more attractive to the top 10% without abandoning their focus on social justice? What follows are suggestions for building a progressive agenda that promotes collective solutions while at the same time addressing the concerns and interests of the top 10%:
- Provide a positive political identity for the top 10% caught uncomfortably between those at the very top (with whom they struggle to keep up) and those at the bottom (that they seek to distance themselves from). Appeal to this group’s increased political awareness during Covid.
- Acknowledge that the top 10% struggle to maintain their lifestyles and have fears for the future. They often told us about their anxieties in relation to their job security; rising cost of living; their competitiveness in today’s labour market; political polarisation; and their children’s futures. The message should be: “if it’s not working for you, it’s certainly not working for the rest.”
- Speak to the cracks appearing in narratives around meritocracy. After Covid-19, many of the top 10% may have found themselves made redundant or dependent on the state through no fault of their own. This means emphasising that there are factors beyond individuals’ control that shape their economic and social well-being, that they cannot isolate themselves forever from increasing inequality and that public policy has a crucial role in their lives.
- Politically reassure the top 10% that shared action has the potential to improve everyone’s quality of life. High incomes only provide security if other structures are in place (such as a reasonable cost of living and resilient public services – use the pandemic as an example).
- Actively promote an improved public sector as an antidote for their fear and isolation: improved quality of life/social ties/shared sense of citizenship. For that, we should emphasise that the top 10% also rely on public services and infrastructure over a lifetime (including long-term care, as they live longer).
- Acknowledge that the current locus of top 10% identity is work-based and appeal to their desire for private sector reform. At the same time, Covid-19 has provided the opportunity to shift their work-life balance from ‘work is life’ to one that is better for them, their families and the environment long-term.
- Appeal to the top 10% desire to feel more rooted in place. The flexibility of globalised corporate work culture has only suited them up to a point. Their isolation is best countered by greater engagement with those around them. This could be achieved with more participatory local democracy and infrastructure that prepares them and their children for the future.
- Leverage their own sense that the current system is unjust. Most of this group does agree that the very wealthy should be contributing more, because they have taken advantage of lax tax enforcement and growing concentration of wealth. One challenge to this is that the top 10% do not feel rich themselves, so may resent having their taxes raised (especially income) or being called out as rich. This may be countered by drawing attention to their reliance on public spending (e.g., furloughs) and the growing distance with the 1% (who get most of their income from capital).
- Draw on their intuitive awareness that inequality generates insecurity. Low corporate taxes and an emphasis on economic efficiency over resilience have produced an economy that is more vulnerable to shocks.
- Reassure them that progressive policies are designed to protect them and their children in the long-term. This includes confronting the realities of the future under the current government and the disconnect between its apparent values e.g. of family - when the ability to become independent and form families is being prevented by a dysfunctional housing market.
The pandemic provides the opportunity for progressive parties to reach out to the top 10% to play a part in renewing our collective infrastructure. More of this group are likely to have experienced direct state help than ever before and the legitimacy of public investment in our health service has been reinforced. This juncture provides a privileged opportunity to underscore the interdependence of everyone, even those who have done well until now. In the words of Michael Sandel:
“[t]he more we think of ourselves as self-made and self-sufficient, the harder it is to learn gratitude and humility. And without these sentiments, it is hard to care for the common good.”
Marcos González Hernando holds a PhD in Sociology from the University of Cambridge and is Senior Researcher at FEPS-TASC. He is interested in the political sociology of knowledge production, economic debates, the history of the social sciences, and the relationship between experts, elites, and inequality. In 2019 he published his book British think tanks after the 2008 global financial crisis and in 2020 he helped coordinate FEPS-TASC's report Inequality and the top 10% in Europe.
Dr Gerry Mitchell is a social researcher, writer and political activist. With degrees from Cambridge and LSE, she was a PhD Associate at LSE's Centre for Analysis of Social Exclusion and a Research Officer in its Department of Social Policy. Gerry’s research has focused on inequality (she was a contributor to and editor of the FEPS-TASC's report Inequality and the top 10% in Europe); the delivery of welfare to work and working tax credit programmes and the impact on those using them. Her policy experience includes working with Compass; the Houses of Parliament; the New South Wales Government Department of Training and Education and in frontline roles with disabled and long-term unemployed people; children in mainstream and special needs settings and in the NHS. Gerry is an active member of the Labour Party and stood as Parliamentary Candidate for Woking, Surrey in the 2019 General Election.