Blog & Articles

It's too early to be pessimistic about boosting living standards

Date: 11. February 2014
Gavin Kelly

 Things are likely to stop getting worse sometime soon, progress will then be painfully slow, and it’s going to be an awful long time before they get back to where they were before the crash. 

That’s the gist of a major new report on living standards by the Resolution Foundation, which will show that typical household incomes are set to start growing in 2015 and then creep upwards thereafter. But by 2018 they are still likely to be 3.5 per cent below their pre-crisis peak (5 per cent below if we exclude pensioners households).

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These wage stats don't tell us much about living standards

Date: 24. January 2014
James Plunkett

This morning the government released some interesting new stats on wages. It claims that 90 per cent of people saw their earnings rise in the year to April 2013. As I tweeted earlier this week, the data source that the government are using tells a more positive story about wages than the more regular earnings data that drives most public debate. Here are some quick thoughts on the more technical upsides and downsides of the new numbers.

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Why living standards and public finances matter

Date: 30. September 2013
Gavin Kelly

The party that persuades voters it can deal with both issues will win the election.

They are the towering issues of British politics that are not about to go away soon: the steep decline in living standards and the grim state of the public finances. Each compounds the other. Taken together they will dictate the terms of politics between now and 2015.

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The generation that’s going backwards

Date: 19. May 2013
Gavin Kelly

Falling incomes, rising prices, impossible debts ... even before the crash some workers faced a suffocating squeeze

When John F. Kennedy declared that “a rising tide lifts all boats” he was encapsulating the postwar belief that growth would generate steady rises in living standards for all.

Even if richer households were sometimes the biggest gainers, there was at least the guarantee that every household would enjoy some advance. Sadly, even if it once was true, a rising economic tide no longer necessarily helps all individuals or households. Even in better times a large slice of working families were struggling to keep their heads above water.

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Low Pay Is Fast Becoming a Defining Challenge of Our Age

Date: 28. February 2013
James Plunkett

This post originally appeared on the Huffington Post

You can tell a lot about a downturn by the image that comes to define it. From queues outside job centres in the 1970s and early 1980s to the poll tax riots that preceded the early 1990s recession, the pictures that stick in the mind have a habit of reflecting the key economic and political challenge of the time. So what will be the iconic image this time around? Images of last summers' riots will undoubtedly endure. But the more representative picture of the squeeze so far would be much less dramatic: a low paid, part-time worker, struggling in to work each day, bringing home a wage that barely pays the bills.

Today's new figures from the ONS confirm what's been suspected for some time: low pay is fast becoming one of the defining economic challenges of our age.

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Spending more on less

Date: 27. September 2012
Giselle Cory

There has been a lot of discussion of inflation lately, as prices continue their upward march. The consumer trends data out today from ONS gives us an alternative way of looking at inflation. It shows that we are spending more and getting less on essentials like food, housing and transport. This is shown in the chart below, where solid lines show the amount we are buying and dashed lines the amount we are paying for it (effectively real terms versus cash terms consumption).

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Up-skilling the middle

Date: 4. July 2012

Successive governments have certainly placed skills policy at the heart of strategies to raise living standards and tackle low pay. Yet now there are growing doubts about whether upskilling workers will be enough to bring about genuine improvements in the living conditions of people currently on low to middle incomes (LMIs). In a new paper for the Commission on Living Standards, hosted by the Resolution Foundation, I re-examine the links between skills, the changing labour market and wages, arguing that in the long run, skills policy has a crucial role to play in equipping LMIs to thrive in the modern labour market.

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Too fast, too slow – how the passing of time is shaping politics for Cameron and Miliband

Date: 8. May 2012
Gavin Kelly

This post originally appeared on Gavin's New Statesman blog

Two years into the life of the coalition and all the sudden the passing of time seems like Ed Miliband’s best friend and David Cameron’s worst foe. For a government that has lost its footing, facing an opposition learning how to benefit from the stumbling and fumbling, the long expanse of time left in this parliament will be starting to feel less like an opportunity to develop and deliver an agenda and more like an ordeal to be survived.

It’s not just the slow motion horror of the six weeks since the budget or the likelihood that the next few weeks, dominated as they will be by the Leveson inquiry, will feel like a very long stretch indeed for Jeremy Hunt and David Cameron. It’s the six budgets and autumn statements the coalition parties have to negotiate before the next election; the thirty seven months of enervating governing grind to get through; and the fact that come the next election it will have been a full 23 years since the Conservatives won outright, an observation that is weighing increasingly heavily on the Tory ranks who sense their prospects of doing so next time aren’t brightening. A lot of politics is still to happen even before the parliament reaches half-time – and the second half is littered with all manner of political, economic and legal icebergs.

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Inflation newspaper

Food and fuel prices will be key to inflation in the year ahead

Date: 17. January 2012
James Plunkett and

This post originally appeared on Left Foot Forward

Today’s ONS inflation statistics presage what will be one of the few positive economic stories this year

Backed by strong discounting from retailers, RPI fell from 5.2 per cent in November to 4.8 per cent in December, while CPI fell from 4.8 per cent to 4.2 per cent, its largest one month drop since December 2008.

Stressed-out-by-inflationThat of course means inflation remains at more than twice the level of its Bank of England target. Nonetheless, future months are likely to see further falls, bringing welcome relief to real household disposable income.

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