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Transatlantic lessons for middle Britain

Date: 13. March 2013
Sophia Parker

This blog originally appeared on Bright Blue

Today sees the launch of 'The Squeezed Middle: the pressure on ordinary workers in America and Britain' - a collection of essays from America’s leading thinkers in the field of living standards to understand what lessons, if any, we might draw from the US experience.

You may well wonder what we can take from a country where the crisis in living standards is so great that it’s not an exaggeration to talk of America’s ‘lost generation’. Productivity has risen threefold since 1970 but barely a dollar from this buoyant economy has made its way into the average person’s pay packet. Even the recent return to moderate growth in the US has not eased the challenges most families are facing

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Squeezed Middle: a wake-up call

Date: 13. March 2013
Sophia Parker

This blog originally appeared on Public Finance

In the UK, low and middle income families face flatlining or falling living standards. But the so-called ‘squeezed middle’ is under even greater pressure in the US. What can we learn?

New analysis of the ‘squeezed middle’ in America and Britain, launched today by the Resolution Foundation, raises some important pointers for the future here in the UK.

You may well wonder what we can take from a country where the crisis in living standards is so great that it’s not an exaggeration to talk of America’s ‘lost generation’.

Productivity has risen threefold since 1970 but barely a dollar from this buoyant economy has made its way into the average person’s pay packet. Even the recent return to moderate growth in the US has not eased the challenges most families are facing.

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Never had it so squeezed

Date: 13. February 2013
Matthew Whittaker

This post orginally appeared on Public Finance

Even in the boom years, a large proportion of the population never shared the proceeds of growth. That’s even less likely today as austerity really hits home

Mired as we are in a fifth year of economic crisis and austerity, it’s easy to forget that not long ago we’d enjoyed fifteen sustained years of economic growth.
But it may not be just the severity of the downturn that explains why the good times feel so distant: for many of us, the growth years were not quite as rewarding as we once thought. Prior to the big squeeze, Britain was increasingly divided, and most of us were on the wrong side of the chasm.

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The politics of childcare are heating up. Here's why

Date: 27. October 2012
Gavin Kelly

This post originally appeared on Gavin's New Statesman blog 

Often an issue only gets the attention it deserves due to a shift in the wider political context.  And so it may be with our creaking childcare system. Despite unprecedented increases in public support – and major improvements - it’s still the case that during the Labour years childcare never received anything like the concerted attention going to schools and hospitals.   

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Explaining the child benefit saga

Date: 6. March 2012
Gavin Kelly

This post originally appeared on Gavin's New Statesman blog

Observing a government in the midst of a policy u-turn is rarely an elegant sight. When it is drawn out over an extended period, and fuelled by briefing and nods and winks from the PM downwards, it is even less edifying. So it is with the coalition's current contortions on Child Benefit.

None of the proposals being discussed as improvements to the coalition's original idea (to axe Child Benefit for households with a higher rate tax payer) are attractive. All are likely to be an administrative nightmare. Indeed, if the government could press rewind I doubt very much they would choose to repeat the initial pledge they made (not withstanding polling evidence showing it could be quite popular). And if they could press fast-forward into the future my guess is that they would probably decide not to plump for the sort of complex proposal that they are reportedly leaning towards (for instance creating what would in effect be a new tax threshold at £50k).

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White house slider

Are we catching the US disease?

Date: 21. November 2011
Gavin Kelly and

This post originally appeared on Gavin's New Statesman blog

In the 1970s, the policy and political elite obsessed about the 'British disease' -- the failure of our system of industrial relations, and its impact on UK prosperity relative to our competitors, above all the US. Forty years on, their concern should be whether we have caught the 'US disease': the failure of the broad mass of US households on low to middle incomes, the middle-class in American parlance, to benefit from the recent era of economic growth and rising productivity. Typical US family incomes today are at the same level as they were in the late 1980s, and median wages have flat-lined for an even longer period.

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Macroeconomic Analysis

Are we facing an American nightmare?

Date: 21. November 2011
James Plunkett and

This post originally appeared on the Spectator blog

With the Chancellor’s autumn statement due next Tuesday, we're all talking about growth. The ECB and Bank of England now say the UK economy is set to grow at less than half the rate the OBR forecast back in March. That makes it all but certain that George Osborne will announce dramatic downward revisions to UK forecasts when he stands up in parliament next week.

But before all the fighting about Plan As and Bs reaches fever pitch, it’s worth asking what the next decade looked like under the previous, more optimistic growth projections. The answer isn’t pretty and it helps highlight one major question that’s rarely asked in our debate about GDP: what kind of growth are we after?

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House of Congree

HELP for America's struggling middle class?

Date: 9. June 2011
Sophia Parker and

Last month, Tom Harkin, one of the Democrat giants of the Senate and Chair of the Health, Education, Labor and Pensions (HELP) Committee, convened the first of several meetings to examine why the American Dream appears to be ever harder to reach, even for those who – in Clinton’s words – ‘work hard and play by the rules’. The full footage and transcripts can be read here.

I suspect Sen. Harkin had hoped for a more focused discussion than he got about how to address the crisis of America’s so-called middle class - the stagnating median wages, rising income inequality and declining standards of living that are attracting more and more mainstream attention in US politics.

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Why the 'squeezed middle' is here to stay, Observer

Date: 22. May 2011
Gavin Kelly

Gavin Kelly, deputy chief of staff in Downing Street from 2007-2010 and now chief executive of the Resolution Foundation, explains why solving the problems of the 'squeezed middle' will change ...

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