Geoff Tily at the TUC had some powerful graphs on changes in real wages from 2008 to 2016 yesterday. These address the claim that the UK economy is now doing well because there has been an undoubted real wage increase in the last year.
As he shows, real wages are still down from 2008 in every region of the UK:
It is notable that Northern Ireland, Scotland, the North East and Wales have done better than most of England but that's mainly because of low pay in those areas and the national minimum wage increases having greater impact as a result, I suspect. This is the underlying data:
Before anyone thinks that the UK is in anything like a position of economic strength it is very clear that they need to think again. This is a story of continuing failure, not least at government level, where austerity has crushed the UK economy with very obvious consequences.
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That’s the most depressing thing I read all week!
While British GDP growth is routinely trumpeted, GDP/capita is only about +3% since 2008 peak.
So if population growth of 5% over the period eats up most of the GDP gains, where is the rest going? Is it a growing share of corporate profits or inequality that is pushing down the median of wages?
Good question
Mainly growth in profits and rents
If GDP is increasing but median wage isn’t that means that inequality is rising, i.e., all the growth is going to the top end.
If I have an economy of 6 people,
2 on 20k, 2 on 30k and one on 100k, Total 200k: Median wage 30k
then after one decade there are
2 on 20k, 2 on 27k, and 1 on 116k, Total 210k: Median wage 27k
GDP has risen 5% but median wage has fallen 10%. It’s trickle up economics!
The failure of politicians to address this, is leading to many of bad and unnecessary things. And it does not have to be this way!
Tell me about it!
In 2010 my wages (after tax) were above the median. Now they are some £2.5K below it. I work in the public sector BTW.
I’ve done nothing wrong – I’ve kept my skills up to date and even rotated into another area of work to keep myself employed and viable. But it never seems to be enough. I’m grateful to still have a job – and rather than being your typical ‘coaster’ in his early 50’s I’ve joined the ranks of the new ‘grey(ing) apprentice’ phenomenon that seems to be emerging. I enjoy the work and the challenge but if things continue as they are I can’t see me reaching retirement age I’m afraid. There just won’t be the money in my line of work (social housing development) in the future.
Worrying
And crazy