October 2021
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The economy is recovering. So, why are people getting poorer?

You’ll all have seen the headlines: Britain recovering: Britain will have fastest growing economy: Feelgood factor lifts Britain etc etc etc. And the headlines (coming conveniently just before the EU elections) about UK employment reaching record highs.

I’ve no doubt that the British economy is growing. Though I’m struggling to understand how the Government borrowing and spending £110bn a year is only giving £37bn (2.5%) economic growth.

But behind the triumphant headlines and feelgood stories, there is a worrying trend the papers don’t seem so keen to mention – average wages continue to fall (while prices continue to shoot ever upwards)

Here’s a possibly interesting chart (click to see more clearly)

employment chart

What does the chart show? The red line, measured against the right hand axis, shows real average weekly regular pay (excluding bonuses) for the whole of the UK in pounds, adjusted for inflation (in March 2014 prices). The blue line, measured against the left hand axis, shows the unemployment rate (in percent) for everyone aged over 16 in the previous three months. Someone is defined as unemployed if they are without a job but are currently looking for one (so does not include those out of the labour market for any reason). The green line (also measured against the left hand axis) shows the underemployment rate – that is, the number of people in temporary or part-time work because they can’t find a full-time job, as a percentage of the total number of people in employment.

Why is the chart interesting? The continuing decline in unemployment has dominated the headlines recently, and the fall since the middle of last year has been dramatic. The latest figures from the ONS suggest an unemployment rate in the three months to March of just 6.8% – the last time unemployment was that low was in February 2009. However, although the underemployment rate is falling slightly, it is not falling nearly as fast, and in fact, it may soon overtake the unemployment rate. Meanwhile, real average regular earnings have continued on their downwards trajectory, despite reports to the contrary (which usually include bonus payments or compare different time periods), and are now £5 per week less than they were 10 years ago.
So, while the Tories trumpet their “great economic recovery” story, many people, seeing their living standards continue to fall, might be more receptive to Red Ed “Nationalise Everything” Miliband’s “only Labour will solve the cost of living crisis” story.
(to be continued tomorrow……..)

2 comments to The economy is recovering. So, why are people getting poorer?

  • Paris Claims

    As predicted by many, incomes would drop and housing costs rise due to a huge influx of cheap labour from Eastern Europe and the third world.
    Wasn’t really that difficult to figure out.
    Let’s also factor in a rise in crime, squalor, and a strain upon public services and we can see exactly what our “elites” are doing to us. They are systematically taking a wrecking ball to the country.

  • That under-employment climb tells its own story, doesn’t it? And it shows just how the politicians cherry pick the statistics for anything that supports their lies.

    Fact is there is no recovery. The recent housing boom has injected more money into the economy via the taxpayer backed mortgage scheme that the government has provided by increasing borrowing; but there has been no impact upon the number of paid working hours available nationwide, which are needed for families to pay their household bills.

    All we are seeing here is how zero-hour contracts and manipulation of benefit claimant figures have served to further corrupt the statistics in the coalition’s favour.

    We need to get away from all this statistical nonsense because their bases change frequently and we are unable to compare like with like. Instead, we need to focus on what is real – and what LibLabCon are not prepared to talk about:

    When interest rates rise: the sh*t will really hit the fans! (Another housing crash; immigrant landlords buying-up our housing stock at knock down prices for their kin; more housing benefit paid to the indigent population losing their first homes; and yet more borrowing to complete our Nation’s demise).

    God help us if we don’t get a UKIP government in 2015.

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