Indeed, those in the bottom 20% have seen their wealth fall over this period. By contrast, those in the top quintile have seen their wealth increase by almost 20%. This uneven pattern of gains and losses in wealth has widened what was already a fairly wide wealth divide: in 2010, those in the bottom income quintile had average net wealth of £ compared with £ for those in the top quintile. That means the gains in social well-being since 2008 are likely to have been considerably more modest than the rise in headline wealth would imply: these gains have largely been harvested by the already-asset-rich and not at all by the already-asset-poor. Looking across the income distribution, then, it is clear that recovery has been associated with both the incomes and, more strikingly, the wealth of the least well-off having broadly flat-lined. Recovery has not lifted all boats, especially some of the smaller ones. This pattern may go some further way towards solving the recovery puzzle. Whose recovery? To a significant extent, those already asset-rich. (c)  Age distribution  A third dimension of recovery is how it has affected different age groups. Chart 18 looks at the evolution of nominal average hourly earnings across different age groups. It suggests a significant inter-generational income shift has been underway over recent years. Nominal earnings of those under-30 have risen by a cumulative 6% since 2007, while those over-50 have seen cumulative gains of 22%.
And the impact of so-called Quantitative Easing (QE) is also likely to be different across cohorts of society. 3 Understanding the differential impact of monetary policy across these sectors is important in general, as well as for gauging whether policy is working through its intended channels. Fourth, and perhaps most important of all, the distribution of outcomes across different groups can matter greatly for the well-being even of the economy as a whole. To see that, consider a simple example. Imagine the economy comprises two regions, one with income of 10, the other with income of 90. Now imagine income falls by 5 in region one but rises by 10 in region two. At least as measured by GDP, the economy and society as a whole is 5% better off. But is it? The income of the already-rich has risen by just over 10%, while the income of the already-poor has fallen by 50%. Does the former really swamp the latter when it comes to the well-being of society? There are grounds for doubt. Empirical studies show that every extra pound of income or wealth yields less satisfaction than the last. A millionaire values a £ lottery win less than someone on the living wage. For economists, this goes by the name “diminishing marginal utility”. Yes, I know we should get out more. If they are sufficiently unevenly distributed, income losses by the poor may more than offset gains by the rich in a social welfare sense, even if not in a GDP sense.