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Labour must now clear a higher bar on the minimum wage

Date: 19. September 2013
James Plunkett

Vince Cable's announcements have allowed the Lib Dems to make the running on low pay but they still leave an opportunity to set out a tougher approach.

This year's pre-conference rumours gave unusual prominence to the minimum wage. After the consensus reached in the late 2000s, leading thinkers in all parties have begun to argue that it's time for the system to be strengthened. There were even suggestions that the Conservatives planned to announce an increase in the minimum wage at their conference. With as much as a fifth of the UK workforce now struggling on low pay, the problem has become too big to ignore.

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Chill out about the debt bubble? Not yet.

Date: 18. May 2012
Gavin Kelly

This post originally appeared on Gavin's New Statesman blog

What role did high levels of household debt play in generating the crash and what do they mean for our economy over the next few years?

Well-worn questions, you might think. And no shortage of people have asserted answers.  Following 2008, a whole new crunch-lit genre of books emerged to explore this. There is – or perhaps, was – something of a post-crash orthodoxy that the rise of easy credit, fuelled by run-away rewards for the super rich, and a squeeze elsewhere, encouraged ever greater borrowing.

A favoured narrative, often echoed by the coalition, is that debt ballooned as consumers (and home buyers) went on an irresponsible binge – it was all demand-led.  Others argue, particularly in the US, that exploding debt reflects an act of policy – whether explicit or implicit – to increase the supply of easy credit for low and middle income groups who were seeing their wages stagnate.  From this perspective, it was less a story of families living beyond their means and more about coping when their means stopped growing.

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Debt and inequality conundrums

Date: 15. May 2012
James Plunkett

This post originally appeared on the OECD blog

How did inequality and household debt interact in the run up to the 2008/09 financial crisis?  Today, a new report by NIESR for the Resolution Foundation provides new evidence on that question for the UK. The new analysis confirms the severity of the borrowing situation of low income households in Britain before the crash and raises difficult questions about patterns of consumption in an era of high inequality.

The report’s key contribution is to dig beneath headline figures for household debt to describe the borrowing picture for households at different points in the income distribution. It’s well established that UK household debt, in common with many other countries, ballooned in the late 1990s and 2000s, with the aggregate savings ratio—the percentage of household disposable income that is saved—turning negative in 2008 for the first time since records began. Yet so far these headline figures have been something of a black box. 

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IFS money

Why Britain's households got richer - and why they stopped

Date: 6. December 2011
Gavin Kelly and

This post first appeared on Gavin Kelly's New Statesman blog.

Before there is any prospect of shaking the economic pessimism that has engulfed the country we need first to alight upon a credible account of how working families will boost their living standards in the years ahead.

At the moment no-one is mapping out this course to a more prosperous future; but more surprising, perhaps, is the fact that we don't really know how it is that households got richer over the recent past.

 

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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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Who ate all the pie?

Date: 25. July 2011
Gavin Kelly and

This post originally appeared on Gavin’s New Statesman blog

You probably won't be too surprised to hear that for a long time many workers have been receiving an ever smaller portion of the fruits of economic growth. But if we are to properly understand the 'trickle-up' tendencies of British capitalism we need to not only register the depressing headline but get under the surface of what brought it about.

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Wanted: a new purpose for British capitalism, New Statesman

Date: 18. February 2011
Gavin Kelly and

Gavin Kelly asks how Britain can avoid going down the US path where for the last generation the majority of the gains from growth have gone to the richest.

If ...

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Will we catch the American bug? Donald Hirsch

Date: 9. December 2010
Donald Hirsch and

The American middle-class has been complaining since the 1970s about their stagnating incomes. The economic growth that the country has seen since then has gone mainly to the better off. Households at or below the middle of the income distribution have seen no significant rise in their living standards for a generation.

That certainly can't be said of the UK – yet. Here, living standards have improved considerably for most groups in recent years. However, in the past decade, we have started to look a little more like the US...

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