Top earners' wages growing faster

Scotland’s top one per cent of income earners - about 25,000 people - have increased their wages and total income at a greater rate than the rest of the nation’s workers in the past decade, according to a new report funded by the Economic and Social Research Council.

Someone in the top one per cent income bracket in Scotland can expect to earn 20 times more than someone in the bottom one per cent.

But once taxes and benefits are taken into account, overall household income inequality in Scotland has not increased substantially since the mid-1990s.

This is because the UK tax and benefit system – which also applies to Scotland - transfers more income from higher to lower income households than the average developed country, according to the report. To put these transfers in context, the richest one per cent of earners contribute a fifth of income tax raised in Scotland.

Much of the increase in wage inequality in Scotland has been driven by increased part-time working. This is particularly the case in lower-paying occupations and although this has increased inequality, the authors note that some workers may prefer shorter hours.

The report also shows that another important factor has been the changing job market. The share of higher-paying and lower-paying jobs increased between 2001 and 2010, while the share of middle-wage jobs fell, which is as a result of technological change and globalisation.

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