Appalling economic record of government exposed: median wages fallen 10% since 2008

cepheus

It's difficult to understand why the present government has a reputation for economic competence. The limited recovery we have seen is due to relaxing their own stated policy of austerity. However, by dropping their austerity programme recovery would have been faster and wages for real people (rather than the rich which distorts the mean average) would have risen rather than dropped. I wonder how many 'hard working people' fully realise this?

From the London School of Economics - A series of background briefings on the policy issues in the May 2015 UK General Election

Real Wages and Living Standards

• Real wages of the typical (median) UK worker have fallen by almost 10% since 2008.
  
• Compared with the trend of 2% yearly real wage growth (from 1980 to the early 2000s), this represents around a 20% shortfall.
  
• This recent experience is weaker than in the majority of other OECD countries............

http://cep.lse.ac.uk/pubs/download/EA024.pdf

Generali

cepheus wrote: »

It's difficult to understand why the present government has a reputation for economic competence. The limited recovery we have seen is due to them relaxing their own stated policy of austerity. However, by dropping their austerity programme recovery would have been faster and wages for real people (rather than the rich which distorts the mean average) would have risen rather than dropped. I wonder how many 'hard working people' fully realise this?

From the London School of Economics

Real Wages and Living Standards

• Real wages of the typical (median) UK worker have fallen by almost 10% since 2008.
• Compared with the trend of 2% yearly real wage growth (from 1980 to the early 2000s), this represents around a 20% shortfall.
• This recent experience is weaker than in the majority of other OECD countries.
• The post-2012 fall in unemployment has not yet had a discernible impact in fostering wage growth. In the recoveries from the 1980s and 1990s recessions, real wages grew as unemployment fell. This time, median real wages have actually dropped a little as unemployment has fallen.
• Falling real wages is a principal reason why the living standards of working age households are doing worse than before the crisis

http://cep.lse.ac.uk/pubs/download/EA024.pdf

You appear to be looking at a time period, a third of which the Tories weren't in power for to make your point.

It's probably worth noting that unemployment stayed relatively low through the period, compared to similar economies. Perhaps people decided it was better to earn something than nothing.

chewmylegoff

cepheus wrote: »

It's difficult to understand why the present government has a reputation for economic competence. The limited recovery we have seen is due to them relaxing their own stated policy of austerity. However, by dropping their austerity programme recovery would have been faster and wages for real people (rather than the rich which distorts the mean average) would have risen rather than dropped. I wonder how many 'hard working people' fully realise this?

From the London School of Economics - A series of background briefings on the policy issues in the May 2015 UK General Election



http://cep.lse.ac.uk/pubs/download/EA024.pdf

Perhaps the reason they have a reputation for economic competence is relative rather than absolute - people are comparing them to the previous disastrous labour administration (of which the current labour leadership were a significant part) whose tenure created the economic environment responsible for years of weak wage growth.

Generali

chewmylegoff wrote: »

Perhaps the reason they have a reputation for economic competence is relative rather than absolute - people are comparing them to the previous disastrous labour administration (of which the current labour leadership were a significant part) whose tenure created the economic environment responsible for years of weak wage growth.

Well if we use the Eurostat figures which all comparison across countries, the UK's median income fell in 2008, 9 & 10 and then it increased in the years 2011-14:

http://appsso.eurostat.ec.europa.eu/nui/submitViewTableAction.do;jsessionid=hMSdVlWHwrElorN5kF_Wc-9dQ78vfb5OOS_mWlTYHHC2YwatU1B_!-2089530269

Between 2010 and 2014 by this measure incomes rose quite substantially.

Cyberman60

Labour created the conditions for wages to fall by inviting all and sundry from all over the world during their tenure. Create a massive influx of unskilled cheap labour and a fall in wages is the inevitable result. Follow that up by creating a massive deficit with resulting necessary austerity and we can lay it ALL at Liebore's door, AS USUAL.

... and as usual they seek to shift the blame to the party that is trying valiantly to sort out the mess they left. :eek:

Cyberman60

cepheus wrote: »

It's difficult to understand why the present government has a reputation for economic competence. The limited recovery we have seen is due to relaxing their own stated policy of austerity. However, by dropping their austerity programme recovery would have been faster and wages for real people (rather than the rich which distorts the mean average) would have risen rather than dropped. I wonder how many 'hard working people' fully realise this?

From the London School of Economics - A series of background briefings on the policy issues in the May 2015 UK General Election



http://cep.lse.ac.uk/pubs/download/EA024.pdf

So the first two years of that fall is funnily enough under Liebore.... :rotfl:

cepheus

Generali wrote: »

You appear to be looking at a time period, a third of which the Tories weren't in power for to make your point.

There was little difference between the last Labour administration and the Tories over the past few decades. Neither would have intervened to reduce the gearing, exposure to debt and reckless gambling of the banks. Brown was fond of the light touch approach as long as it brought in short term revenue. The reason there is so much vitriol against Milliband (and in particular the possibility of a pact with Sturgeon who unlike Labour is left of centre) is because he's attempting to move Labour back nearer its roots, although I admit there's a long way to go.

The main economic mistake of this administration has been the austerity programme which guarantees poor wage growth for typical people.

State of the nation: a dismal record for the UK economy

how has the UK economy been doing and how has it impacted the lives and living standards of the electorate? Here, is a whistlestop review of the coalition government’s economic record.

1. The recovery

Starting with the recovery, national income (GDP) is back to where it was before the 2007-08 crisis. But the recovery in GDP has been the slowest on record.

This is partly the product of policy mistakes. The commitment to extreme austerity in the early years of its term of office took demand out of the economy just at a time when a demand injection from the government was urgently needed. Targeting the deficit ultimately delayed the recovery in the economy.

https://theconversation.com/state-of-the-nation-a-dismal-record-for-the-uk-economy-39675

antrobus

cepheus wrote: »

There was little difference between the last Labour administration and the Tories over the past few decades. ...

Yes there is. The last Labour government blew up the economy. There is a very clear difference. And you don't need to be an economist to spot it.:)

cepheus wrote: »

...The main economic mistake of this administration has been the austerity programme which guarantees poor wage growth for typical people....

Austerity? What austerity? What the current mob have delivered in fiscal terms, is exactly what the the previous lot planned to deliver.

Generali

cepheus wrote: »

There was little difference between the last Labour administration and the Tories over the past few decades. Neither would have intervened to reduce the gearing, exposure to debt and reckless gambling of the banks. Brown was fond of the light touch approach as long as it brought in short term revenue. The reason there is so much vitriol against Milliband (and in particular the possibility of a pact with Sturgeon who unlike Labour is left of centre) is because he's attempting to move Labour back nearer its roots, although I admit there's a long way to go.

The main economic mistake of this administration has been the austerity programme which guarantees poor wage growth for typical people.



https://theconversation.com/state-of-the-nation-a-dismal-record-for-the-uk-economy-39675

Well that is one point of view. As an economist I reckon the boom leading up to the 2008 crash and following recession was a classic 'crack-up' boom where there was a massive misallocation of resources to the housing and financial sectors in many countries as a result of Central Banks cutting interest rates in the post-dot com bubble (often erroneous ascribed to 9/11).

The outcome has been completely predictable: there really isn't a huge amount of spare capacity as would normally be expected in a recession. This is because during the boom, investment was misallocated to the financial and housing sectors due to perverse incentives from Government.

Instead, capacity has had to be created in the face of massive Government borrowing 'crowding out' borrowing by business. QE has gone some way to addressing this problem but the problem with economies across the world is that the Government simply takes too much output and diverts it to mostly or entirely unproductive purposes.

enthusiasticsaver

I am not sure whether people look at these stats anyway when deciding on a government to vote in. Personally I have always taken the view that there are lies, more lies and statistics. LSE is nothing more than a socialist mouthpiece so am certain they will spin the stats any way they wish to choose and be selective about the data they included.

As another poster has said the wage decrease started in 2008 - 2 years before the coalition came into power and as we had one of the worst recessions ever it is no surprise that people were willing to stick with lower wages for the sake of having a job. As the tax allowance threshold has increased those of us who are on low wages and work part time ( myself included) have seen an increase in our take home pay even if the overall salary has not increased significantly. My husband on the other hand who is a higher rate tax payer (£44k so not a fortune even though he is a highly skilled engineer) has noticed his wage drop due to increase in tax as the higher rate allowance has not increased significantly.

As for the young being hit hardest I agree that job prospects are not brilliant but both my daughters graduated in the recession - 1 in 2008 and 1 in 2009 and both have found jobs as has my son in law and all their closest friends. Most of them have also bought properties although that is with help from us and our friends, neighbours as parents whether that is financial help or giving them free bed and board so they could save up deposits. It is hard but not impossible and as we have pointed out to our daughters it was never easy to get on the housing ladder. When we got married in the London area in 1982 we rented a employer subsidised flat for a year to save up for a deposit for a tiny terraced 2 bed property, had to spend 3 years doing it up to make it saleable then moved out of the area to the South West on a job move to get a 4 bed detached.

People will vote for who they think will do the best job with the economy and Labour has not got my vote on that and never will while they still have the same two faced culprits in power. I am not saying the coalition has got it all right but I think we have a better chance of making this recovery (such as it is) sustained. Whether it will make a difference or not who knows. Having lived through conservative and labour terms I have not noticed any difference to our living standards as we form part of the "squeezed middle".

Cyberman60

cepheus wrote: »

There was little difference between the last Labour administration and the Tories over the past few decades. Neither would have intervened to reduce the gearing, exposure to debt and reckless gambling of the banks. Brown was fond of the light touch approach as long as it brought in short term revenue. The reason there is so much vitriol against Milliband (and in particular the possibility of a pact with Sturgeon who unlike Labour is left of centre) is because he's attempting to move Labour back nearer its roots, although I admit there's a long way to go.

The main economic mistake of this administration has been the austerity programme which guarantees poor wage growth for typical people.



https://theconversation.com/state-of-the-nation-a-dismal-record-for-the-uk-economy-39675

Oh rubbish !! There was a massive annual deficit difference due to gross spending mismanagement of 160 Billion, the allowing of approx. 2 million Polish here to undercut wages and drive them down, due to not taking up the 7 year moratorium, to name just two.

Incompetence was the difference and always is and will be with Liebore !! :mad: