Is £90,000 a year a middle-class income?
When being interviewed on the radio, I was told by the broadcaster that £90,000 was only ‘middle-class income’ and not enough for MPs. She was, very clearly, out of touch with reality.
The audio version of this video is available here:
The transcript is:
Is £90,000 a year a middle-class income?
I ask because I had an interview with Claire Voges of LBC and The Times newspaper on Sunday night when we were discussing the pay that MPs receive, and she suggested that £90,000 a year wasn't middle-class income, and it was very hard to see how anybody could really live on that amount of money.
Well, there you go. There's some indication of just how out of touch with reality some journalists and political commentators are. And let's put her in context. She began working for David Cameron in something like 2008 as a speechwriter, and went on to work for Boris Johnson when he was the Mayor of London. So, she probably is out of touch with reality.
But the question is, is £90,000 a year high pay? Because that is what MPs are now going to be receiving. £91,000, I think, to be precise.
And so, to answer that question, and to look at Clare's claim that this is a poor amount of middle-class income, I just went and looked at some data, it's really not hard, and I looked at a website called Statista. It’s well worth looking at. Sometimes you have to register to get the data, but a lot of it is free. And most of it, when it comes to the UK, is ONS - Office for National Statistics - data, reinterpreted, reinterpreted in the form of graphs.
So let's look at this one. This graph shows median annual earnings for full-time employees in the United Kingdom in 2023. So, it's pretty up to date.
And what it shows is median income, which is the middle value of income within the range.
And the ranges in question are split into 10 equal parts. In other words, there's the bottom 10%, the next 10%, right up to the top 10%. And there will be the same number of people in each of those groups. So, out of all the income earners in the UK, which I think is something like 28 million people, there will be roughly 2. 8 million in each of these groups.
Okay, you've followed the statistics so far. Now let's look at the numbers. At the bottom, median income is £21,000 per person who earns in the bottom 10 per cent of income earners.
Now I stress that is not the bottom 10 percent of earners overall in the economy because of course not everybody in the bottom 10 percent of earners does actually work. This is about income from work and for those who work full time £21,000 a year is the median pay for somebody in the bottom group of earners, which is unsurprising because basically that's national minimum wage, reinterpreted by the number of hours worked a week on average for people in the UK. So that figure is really not very odd. In fact, it's exactly what we'd expect. And that's reassuring because it tells us that this data is reliable.
Then let's go right up to the top. And what you'll see is that the median earnings for somebody in that top group are £66,669. Now, of course, that is a median because if we took an average, in other words, we took the total pay of the people in that top 10 per cent and divided by roughly 2. 8 million, the figure would be much higher than that, because there are some exceptionally well-paid people, as we know, who would distort the data.
And if we look at this chart as a whole, what we see is, actually, in a median appraisal, nobody gets £90,000 a year. Now, of course, that doesn't mean to say nobody does, but £90,000 a year is high, very high; in fact, £23,000 more than the median earnings of a full-time employee in the top 10 per cent of full-time income earners in the UK as a whole.
So is £90,000 a year middle-class earnings, on average? Clearly not. And yet we have people claiming that, as commentators employed by LBC, a reputable radio company, as if that is the case.
And poor old MPs, we can't recruit them, was her claim because they don't get paid enough to cover the basics of life. You do wonder where some people live, and on what planet that somewhere might be located.
Let's look at another chart because this one is also quite interesting. This one is for 2021/22, which is the most up-to-date data available from the Office for National Statistics. It's, again, a chart from Statista, and this one looks at average gross income per household in the United Kingdom, again by decile group, so split equally. And this one is looking at total incomes, not income from employment, but it is also, as far as I can work out, looking at a mean this time, and not a median. In other words, this is the total income of the group divided by the number of people in it. So it is, in that sense, a little distorted from the previous one, but that's good for the sake of comparison.
Now, let's look at that bottom group again. And instead of them earning £21,000 a year, now, the average, the mean, the one that most people think of as an average, is just £14,729. And this is per household, not per person, and the average household will have two people, near enough, two adult people in it. A bit less, but still, heavily distorted in favor of the multi-adult household.
Let's now go up the range and when we get to the ninth decile, that is the group who are one below the top. They, as a household, have gross income before tax of an average of £92,731. So maybe this is the group that Clare Voges calls middle class. But if so, they are a small part of society. They're already in the top 20%.
Now that's not in the middle. The middle are either the fifth decile or the sixth decile here. And when we look at them, the household income is around £50,000, way below the sum that she thinks is required for anybody to possibly live.
And when we get right to the top here, you can see. that the average is way higher than the figure was from earnings, because it's now £196,638.
Why is that? Well, there are two earners in these households, on average. And this is a mean average, not a median. So the previous £66,000 is doubled to £132,000. But then we're distorted by the fact that this is a mean average, and we are taking into consideration income from other sources. So, rents and dividends and interest and so on are brought into account here which they aren't in the previous calculation. On that basis, Clare Voges clearly thinks that £196,000 is normal and middle class.
I'm afraid to say she's out of touch with reality. That is not normal; that is exceptional.
People really should be able to live on £91,000 a year in the UK, and a lot of people do, and they are exceptionally well paid. And I will be honest with you, I'm a university professor. If I was full time, I would make a little less than the £91,000 a year that she's talking about, but I think that's a pretty generous payment. And it is. But she doesn't understand that.
And we have as a consequence a problem. And the problem is that we have people in our media and people in politics who don't understand what it is like to live a normal life.
I am well aware that I am well off on the salary that I am paid by my university and which comes to me via other sources. I will be open and honest about that. I always have been. But I know that that puts me in a very fortunate position. I don't believe that Clare Voges is in any way in touch with reality.
I happen to think it is true that MPs should be paid a good salary. We should be able to buy the best. But paying more than £91,000 a year for the people who are on the back benches doing the routine work? No, we don't need to pay more than that. That's good enough.
And they shouldn't be allowed side hustles.
They shouldn't be allowed lots of freebies.
They shouldn't be allowed a lot of other things that they have been used to in the past either, like subs from business for their office expenses which are a bung by any other word.
No, all of those things should go. £91,000 a year and the expenses allowed by parliament, I'm happy to agree to.
A second home I'm also happy to agree to because otherwise that job would be impossible but more than £91,000 a year of salary, that takes MPs out of touch with reality. Our commentators in the media might be, but we really don't want that of our MPs. They need to be somewhere related to what is going on in the real world. And £91,000 a year brings them somewhere in that direction. It's enough.
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