I en omfattende analyse af indkomstudviklingen i 25 vestlige lade, udarbejdet af det internationale finanshus McKinsey lyder konklusionne, at hovedparten af de vestlige befolkninger er blevet fattigere siden finanskrisen i 2008, og at det er et markant anderledes mønster end de foregående tyve år. Konsulenthuset konkluderer også, at tendens til fattigere unge generationer vil fortsætte. Deraf titlen på rapporten “POORER THAN THEIR PARENTS? FLAT OR FALLING INCOMES IN ADVANCED ECONOMIES”, som kan læses i fuld længde her.
Uddrag fra indledningen:
Our research shows that in 2014, between 65 and 70 percent of households in 25 advanced economies were in income segments whose real market incomes—from wages and capital—were flat or below where they had been in 2005.1 This does not mean that individual households’ wages necessarily went down but that households earned the same as or less than similar households had earned in 2005 on average.
In the 12 preceding years, between 1993 and 2005, this flat or falling phenomenon was rare, with less than 2 percent of households not advancing. In absolute numbers, while fewer than ten million people were affected in the 1993–2005 period, that figure exploded to between 540 milllion and 580 million people in 2005–14. Taxes and transfers helped soften the blow, but disposable incomes were nonetheless flat or down in 20 to 25 percent of income segments on average.
The severe recession that followed the 2008 financial crisis and the slow-growth recovery since are a fundamental cause of this phenomenon, but we find that deep-rooted demographic and labor-market factors also played a role—and will likely continue doing so, even if economic growth accelerates. These factors include shrinking households, a smaller share of GDP going to wages, and increased automation in the workplace.
Even in the 2005–14 period, market incomes in most of the countries we studied would have risen slightly had it not been for such changes. In this report, we detail the extent of the “flat or falling” phenomenon and the underlying factors, and outline some options for dealing with what is potentially a corrosive social and economic development.
THE GROWING PHENOMENON OF FLAT OR FALLING INCOMES IN ADVANCED ECONOMIES
There are several ways of thinking about income inequality and its implications. The most commonly used approach in recent years has been to look at the rising gap between the wealthiest segments of the population and those in the middle or lower end of the scale. This, for example, has been a focus of French economist Thomas Piketty, whose bestselling 2014 book about the concentration of wealth going to top earners sparked broad public discussion.2 Another frequently used approach to inequality is to focus on the poor, those with insufficient income to provide for their basic needs, often calculated as a percentage of the median income.
Our research looks at a third aspect, which has not been as widely studied or documented: the very rapid growth in the proportion of income segments in advanced economies whose earnings both before and after taxes and transfers have been flat or falling. This goes beyond the degree of inequality measured in the standard Gini index by providing a detailed view of the trajectory of all income segments, which can be lost in a consolidated index.
We focus on income rather than on wealth or consumption, and we also look at the evolution of incomes over time, rather than at a fixed point. In our research, we used three approaches to size this flat or falling phenomenon. The first analyzed changes by income segments, or households divided into deciles (tenths), quintiles (fifths), and even percentiles (one-hundredths) depending on where they rank in the national income distribution.
WHY INCOMES STOPPED RISING
The recession that followed the 2008 financial crisis was one of the deepest and longestlasting downturns of the post-World War II era, and the recovery that followed it has been unusually sluggish in many advanced economies, especially in Western Europe. The downturn was the single biggest factor affecting incomes in the 2005–14 period. However, it was not the only cause.
Longer-term demographic and labor-market developments in each of the countries we examined also played a role in the flat or falling income trend and will continue to do so. To understand how these different forces played out, we analyzed the patterns of median market and median disposable incomes for two periods: 1993 to 2005 and 2005 to 2014.8 We focus on income changes of the median income household because middle-income households are representative of the overall flat or falling income trend in most countries, with the singular exception of Sweden.
Wealthier households have a lower marginal propensity to consume. For a discussion of this phenomenon and its effect on growth, see A window of opportunity for Europe, McKinsey Global Institute, June 2015. 8 In our analyses of factors causing flat or falling incomes, we standardize the growth rate from 1993 to 2005 and 2005 to 2014 in order to make them comparable. For details, see the technical appendix. The impact of flat or falling incomes could be more than purely economic if the disconnect between GDP growth and income growth persists. 30-40% of survey respondents said their incomes were not advancing McKinsey Global Institute Poorer than their parents?
Flat or falling incomes in advanced economies
Five factors underlie the changes in median incomes that we observe in our focus countries:
Aggregate demand factors. When aggregate demand (or GDP) grows, employment, and labor-force participation also increase, enabling incomes to rise. Conversely, lower labor-force participation rates, rising unemployment, and waning productivity (output per worker) can all lead to stagnating or falling incomes. Unemployment in particular can have a dampening effect on household income.
Demographic factors. These capture changes in the number of working-age people in each household. This number has fallen in several of our focus countries because of the shrinking size of households, the result of changing family structures and lower fertility rates, and aging, which decreases the number of people available to work.
Labor-market factors. These include the evolving pattern in labor demand and supply. This is manifested in the wage share of GDP and the median household’s share of wages. Among the forces that can explain movements in these two factors are income gains for high-skill workers and negligible income gains or declines for low- and mediumskill workers, and the share of part-time and temporary work, which is often less well paid proportionately than permanent or full-time work. Labor-market factors can vary depending on the role and influence of unions, different national labor regulations and practices, trade and immigration, and the degree to which jobs are affected by automation.
Capital income factors. These include capital gains from asset sales, interest and dividends from investments, rental income, income from business, or income received from private pension plans.
Tax and transfer factors. Transfers include a range of cash payments to beneficiaries such as social security payments, disability or workers’ compensation, and unemployment benefits.9 The first three of these categories—aggregate demand, demographic, and labor-market factors—contribute to changes in labor income. Changes in market income are driven by changes in this labor income, together with changes in capital income. Disposable income is the amount households receive after taxes, and transfers are applied to market income. Exhibit E3 shows how each of these factors played a role in the 2005–14 period, and the difference with the previous 1993 to 2005 period, by country
