Blog & Articles

The squeeze on earnings continues

Date: 22. November 2012
Alex Hurrell

The ONS 2012 Annual Survey of Hours and Earnings release that came out this morning highlights that median real wages have fallen between 2010-11 and 2011-12. Median gross annual earnings for full-time employees were £26,500 for the tax year ending 5 April 2012, an increase of 1.4 percent from the previous year. But over the same period prices rose 4.8 percent according to the ONS’s Retail Price Index (RPI) measure. That implies that the earnings of a typical employee have actually fallen 3.2 percent in real terms. In fact, after accounting for inflation the median wage for full-time employees is now lower than it was in 1999-2000 (£26,900).

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Does the Treasury want to link benefits to earnings?

Date: 21. September 2012
Giselle Cory

Benefits used to be uprated using RPI, a measure of price inflation. This changed to CPI last year. This is also a measure of prices, but crucially it runs lower than RPI. This move generated savings for the Treasury. It has also had an impact on living standards.

For the last few years the UK has been experiencing earnings growth far lower than price inflation (see chart). This has caused a squeeze on living standards. If the rumours are to be believed, it has also prompted the Treasury to ask if more savings can be found by uprating benefits against earnings growth instead of CPI.

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snakes ladders300

Want to earn your way up? Fine – just don’t be a woman, live outside of London, or work part-time

Date: 23. September 2011
Gavin Kelly and

This post originally appeared on Gavin's New Statesman blog

Who earns their way up in today's Britain? Recent work suggests the story of mobility is not all doom and gloom. It showed a significant rise in overall earnings mobility in the 2000s compared to the 1990s, admittedly starting from a low base. More people are now climbing the earnings ladder in their own lifetime, which of course means that more people are falling down too.

But who benefited from this from increased mobility – who went up, who slid down and who got stuck? Given the constant preoccupation of the entire political class with the notion of social mobility, it’s rather surprising that until now none of them could answer these questions. Now new research allows us to fill this gap, and in doing so it tells us some important things about the character of contemporary Britain.

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Willetts10

Willetts plays snakes and ladders

Date: 7. September 2011
Vidhya Alakeson and

This post originally appeared on The Spectator Blog

Social mobility has become something of a hot topic for the coalition. February's Social Mobility White Paper made it the government's number one social policy goal. Yet arguments over tuition fees have rather drowned out much of what they have to say on the topic, particularly when it comes to education and skills. So it was interesting to hear Higher Education Minister David Willetts restate the government's case with a speech at the Resolution Foundation yesterday.

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