The UK and US may not be seeing the massive economic riots of Greece, Spain or Portugal, however the people are still facing tough economic difficulties, particularly the lower and middle classes where habits are changing; There is a marked rise in theft in the UK and people are more concerned by short term financial decisions in the US.

These are the signs of a significant financial crisis, which looks set to become even tougher in the coming years.

The current global economic crisis provokes protests in Greece, riots in Spain and Portugal and strikes in Italy. The situation hasn’t yet reached quite such explosive levels in the US or UK, however, research does show that inequality is rising and that the middle and poorer classes are particularly suffering.

A recent study by Professor Wolff, from New York University, shows that inequality in the US is widening. The report points out that the gap between rich and the poor is considerably greater than it used to be. The middle class has lost 18% in net worth, while the wealth of the top one percent of America’s richest people has increased by 71%.

The top 20 percent, of the most well heeled people, own 85 percent of the wealth whereas the bottom 40 percent has no wealth at all, or even severe debts.

Saundra Davis, President of the Financial Therapy Association shares this view. She explained, in an exclusive interview with ‘The Voice of Russia’ that “there is an income gap and a wealth gap. The challenge is that the poor are still very much left behind.”

In the UK, the situation is a little different. The BBC reports that chief executives’ pay in the country’s 100 largest companies rose by 49% in 2011, while the average increase in their employees’ pay was less than 3%. Even so, the 2012 Report “Living standards, poverty and inequality in the UK”, by the Institute for Fiscal Studies indicates that: “income inequality in the UK fell sharply in 2010–11.

The widely-used Gini coefficient [which defines inequality gaps] fell from 0.36 to 0.34. This is the largest one-year fall since at least 1962, returning the Gini coefficient to below its level in 1997–98.”

Karen Rowlingson, Professor of Social Policy at the University of Birmingham, and co-author of the book Wealth and the wealthy (The Policy Press, 2012) stated in an interview with ‘The Voice of Russia’ that inequality “depends on what period you’re looking at. If you take a really broad perspective from 1900 to 1979 inequality went down in the UK. From 1979 to the 80’s we had a big rise in income inequality.

Then the inequality flowed down in the 90’s and early 2000s. During very recent times, it is quite difficult to have a clear picture, but in a recession, what often happens is that people with high and middle incomes, see their incomes come down, and people at the very bottom, because they receive social security benefits, see their incomes stay the same and even rise with inflation.

That is why inequality looks a bit lower at the moment than it was maybe 2, 3 or 4 years ago.”

However financial disparities remain with multiple contrasts readily apparent in the UK: “There is the income inequality. There is also inequality in wealth (housing, wealth, savings and pensions),” said Dr. Rowlingson. The same situation can be seen in the US where, according to Sarah Davis, “problems come from the financial market, the housing market, but also the job market. The challenges are on multiple levels.”

Nevertheless, the widening of inequality seems less worrying than the rise of poverty. Karen Rowlingson believes: “inequality is going down but poverty is going up” mainly because of income stagnation and price increases. Poverty is increasing more significantly for some parts of the population.

The study from the UK’s Institute for Fiscal Studies, demonstrates that: “Relative pensioner poverty fell for the fourth successive year but relative poverty among working-age adults without dependent children has been steadily increasing in recent years.”

One of the consequences of such an economic climate is that in both the US and the UK, people’s habits and daily behavior are changing in response to their economic conditions. In America, Saundra Davis observes; “some people are taking a second job. Some people are returning to school to have a better career. However lots of people believe that they’ll never be able to achieve their dream. That is why they make choices that may not be good for their long-term financial health, but they are managing the best they can in the situation they are in.”

In Britain, the situation is difficult for many people from the middle and lower classes.Dr. Rowlingson told us that “people in the middle are cutting back on non essentials. They are staying home, they are being careful with their money more.

At the bottom, there was something out in the news today about how people are stealing from shops and police officers were talking about how many people were doing this because they could not afford the essentials. Young mothers were stealing nappies from a shop. They could not afford to buy baby milk.”

Because of stagnating incomes and expanded debts, the situation for middle-class people is particularly worsening. These segments of the UK and US populations are losing financial security, even if people are still working as they did before the crisis.

The situation will get no better in the near future, though many experts believe, that depends of course on governmental decisions. In the case of the UK, Karen Rowlingson commented that “the government is developing really tough policies which are counter-productive. We are just serving the recession. The government needs to spend more and not cut spending.” There seems to be a long way to go before the Western economies are anywhere near a full fiscal recovery.