The reason most people are feeling poorer while the government says we’ve never had it so good [IMAGE]

The next annual budget is nearly upon us and, as usual, the government is reporting that we have a healthy and growing economy. But for many, this just doesn’t line up with feeling poorer and less secure in their work. The reason for this is simple, but deeply worrying.

Plummeting wages

The reason most working people feel poorer today is because wages have dropped 10% since 2007. In short, people feel poorer because they are poorer. As The Financial Times reported [paywall] last week:

Between 2007 and 2015, the UK was the only big advanced economy in which wages contracted while the economy expanded.

Britain’s GDP went back to pre-crisis levels in the third quarter of 2013 and it is now nearly 10 per cent larger than in the second quarter of 2008. Yet in 2014 wages were almost 10 per cent lower than seven years before. During the same period, salaries in France and Germany grew 7 per cent.

Here’s what the performance of UK wages looks like, plotted against those of other developed nations.

The New Labour and Conservative governments have accomplished the unique economic achievement of making their people poorer, even as the economy grows. But how did they do it?

Read on...

There’s no economy, stupid

The answer was captured well in an excellent Guardian column by Aditya Chakrabortty recently:

There’s a lady I’ve been thinking about for the past few days, even though we’ve never met. She’s the central character in a true story told by the Europe expert Anand Menon. He was in Newcastle just before the referendum to debate the impact of Britain leaving the EU. Invoking the gods of economics, the King’s College London professor invited the audience to imagine the likely plunge in the UK’s GDP. Back yelled the woman: ‘That’s your bloody GDP. Not ours.’

Chakrabortty goes on to show how there is no single economy in Britain anymore, because overall GDP growth and economic performance no longer mean life is getting better for the majority of people in the country. For all the talk of economic recovery, only two regions in the UK are better off today than they were in 2007. Unsurprisingly, they are London and the south-east. No one living anywhere else is experiencing an economic recovery. And some are experiencing a depression.

People are feeling poorer because they are poorer

The continual talk of economic growth and rising job numbers neglects the reality of falling wages and the erosion of job security. It is a form of institutional gaslighting. Like an emotionally abusive partner, Theresa May and her Chancellor Philip Hammond are telling working people it must all be in their heads. That they are imagining a poverty that doesn’t exist. But it does exist, and it isn’t the inevitable outcome of a crisis. It is the result of political choices to enrich a few at the cost of the many. And it will continue until the UK electorate chooses to put a stop to it at the ballot box.

Featured image via Public Domain Pictures

We need your help to keep speaking the truth

Every story that you have come to us with; each injustice you have asked us to investigate; every campaign we have fought; each of your unheard voices we amplified; we do this for you. We are making a difference on your behalf.

Our fight is your fight. You’ve supported our collective struggle every time you gave us a like; and every time you shared our work across social media. Now we need you to support us with a monthly donation.

We have published nearly 2,000 articles and over 50 films in 2021. And we want to do this and more in 2022 but we don’t have enough money to go on at this pace. So, if you value our work and want us to continue then please join us and be part of The Canary family.

In return, you get:

* Advert free reading experience
* Quarterly group video call with the Editor-in-Chief
* Behind the scenes monthly e-newsletter
* 20% discount in our shop

Almost all of our spending goes to the people who make The Canary’s content. So your contribution directly supports our writers and enables us to continue to do what we do: speaking truth, powered by you. We have weathered many attempts to shut us down and silence our vital opposition to an increasingly fascist government and right-wing mainstream media.

With your help we can continue:

* Holding political and state power to account
* Advocating for the people the system marginalises
* Being a media outlet that upholds the highest standards
* Campaigning on the issues others won’t
* Putting your lives central to everything we do

We are a drop of truth in an ocean of deceit. But we can’t do this without your support. So please, can you help us continue the fight?

The Canary Support us

Comments are closed