New data shows incomes stagnating for Britons


10:01 am - September 21st 2012

by Richard Exell    


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Sometimes official statistics throw a light on a completely separate issue and that’s the case with yesterday’s personal finance figures from the government’s Measuring National Well-being project.

This programme dates back to the time when David Cameron wanted to establish his progressive credentials and aims to measure ‘wellbeing’.

I’d guess that most commentators are going to note that average families’ incomes have stopped rising, but the figures also show how a controversial benefit change is going to hit the poorest hardest.

What is to be said about these figures? Well, obviously there’s the drop in real incomes last year.

This is no surprise, given that private sector pay settlements have hardly grown since the end of the recession:

In fact, wages have been falling in real terms for a long time and household consumption has followed.

We’ve been arguing for some time that this is one of the factors holding back demand.

The fact that average incomes actually fell last year is depressing, but we shouldn’t load all the blame onto the current government: it’s clear that increases in income slowed drastically after 2001/2.


A longer version is here.

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About the author
Richard is an regular contributor. He is the TUC’s Senior Policy Officer covering social security, tax credits and labour market issues.
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Reader comments


“we shouldn’t load all the blame onto the current government: it’s clear that increases in income slowed drastically after 2001/2.”

Whoa there. What’s clear is just that the median income rose relatively rapidly for a few years from around 1996 to 2002 – particularly in the two years following the introduction of the National Minimum Wage in 1999. If you extended that graph to the left, you’d see not two, but *eight* years in which the median income did not grow at all.

See the graph here:

http://inequalitiesblog.wordpress.com/2012/06/26/peoples-experience-of-growing-inequality-a-closer-look-at-the-middle/

So it’s not as if the long-term rate of increase in median income slowed under Labour; rather, some lost ground was quickly made up after years of stagnation, before the rate fell back to a more normal level.


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  5. sean

    New data shows incomes stagnating for Britons | Liberal Conspiracy http://t.co/KPm4M9Eh via @libcon

  6. Ian Woodland

    New data shows incomes stagnating for Britons | Liberal Conspiracy http://t.co/RUTQP9gt via @libcon





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