Resolution Foundation analysis suggests UK also lagging behind similar economies such as Germany
Workers in the UK are £11,000 worse off a year after 15 years of “almost completely unprecedented” wage stagnation that signals a failure of recent economic policy, according to the Resolution Foundation.
The thinktank, which focuses on low-to-middle income households, compared wage inflation before the 2008 financial crash with the pace set since and found that the average worker was losing out by thousands of pounds a year.
The analysis suggested the UK was also lagging behind comparable economies, such as Germany. In 2008, the gap was more than £500 a year. Now, the Resolution Foundation suggested, it is more like £4,000.
“Nobody who’s alive and working in the British economy today has ever seen anything like this. This is definitely not what normal looks like. This is what failure looks like,” Torsten Bell, the chief executive of the Resolution Foundation, told the BBC.
The broadcaster, which first reported on the analysis, quoted Bell as calling the economic situation “almost completely unprecedented”.
A Labour government presided over the 2008 crash and the immediate recovery efforts. But much of the wage stagnation to which Bell referred has come under the Conservative-led governments sitting since the 2010 general election.
Several major factors – and the Tories’ response to them – have influenced the UK’s economic performance since. Not least among those are Brexit, the Covid pandemic and the Ukraine war.
Last month, the work and pensions secretary, Mel Stride, acknowledged that Brexit had delivered a blow to investment decisions in the UK. He told the BBC: “I think if you have a situation where you create frictions between yourself and your major trading partners, I think you have to accept that that will have an impact.” And he admitted the economic opportunities provided by leaving the EU were insubstantial.
According to the trade union Unite, while the average worker’s real-terms earnings have been hit, corporate profit margins have increased since the pandemic.
Labour has suffered from a lack of trust on economic issues since 2008 but recent polling has suggested the dial may have shifted substantially.
On Sunday, an Opinium poll for the Observer suggested that, with many public sector workers taking industrial action over the burden heaped on them by the cost of living crisis, more than twice as many voters trust Labour to improve public services as the Conservatives.
Last October – at the height of the chaos that marked the short-lived premiership of Liz Truss – another poll Opinium poll for the Observer suggested three-quarters of UK voters – including more than 70% of those who backed the Conservatives at the last general election – had turned on the Tories over the economy.
A Treasury spokesperson told the broadcaster the government was increasing incentives for investment and signalled low unemployment – as well as its plan to increase growth – as signs the country was on the right track.
Source: The Guardian
Recent Comments