Tuesday, July 04, 2017

Wage Growth

On 3rd July 2017 the Office of Manpower Services published a report, Wage Growth in Pay Review Body Occupations.

This research report, by Alex Bryson of UCL and John Forth of NIESR, describes earnings growth among Pay Review Body (PRB) occupations. It compares that growth to earnings growth in comparable non-PRB occupations.

"Averaging across all 353 occupations in the UK’s Standard Occupational Classification, there was a decline of 5.8% in median real gross hourly occupational earnings between 2005 and 2015."

The drop would have been greater had the time period measured been 2007 - 2017, the years from 2005 to the unravelling of the banking system a couple of years later being a period of strong wage growth. Many individual experiences are far from the median.

Had the successive governments been honest and told the public that the 2007-8 financial crisis would lead to such a substantial drop in income for such a substantial proportion of the public one can but speculate what might have happened.

In the wake of the crisis most people were unaffected. We could no longer shop in Woolworths or several other familiar high street shops, but these changes could, at least in part, be blamed on other factors such as on-line shopping. Unemployment rates did not rise suddenly; instead there was a reduction in overtime working, cuts in regular hours and more part-time working. Again the picture was muddied by the growth of zero-hours contracts and the gig-economy. House building came to a sudden slowdown but the effects, in rising house prices as QE money found a safe haven in bricks and mortar, was not felt immediately and then only by that sector of the population involved in house purchases.

Although some people's lives were drastically affected, for the population as a whole the financial crisis had little obvious effect on day-to-day living. The governments, under both Gordon Brown and David Cameron, did a good job of burying the bad news. It is only now, a decade on, that we see just what an economic catastrophe it was for the majority of the population. The distractions of the EU referendum have further compounded the issue. While the financial crisis was global in extent, a very different situation is found elsewhere. Comparative data from other European countries shows that the last seven years of Tory governance has involved a dreadful mishandling of the economy.

The failures of the banking system and of our government have been successfully hidden from the British population.

Anyway, here's the report, published yesterday, with no government fanfare. They probably don't want you to read it.

Wage Growth in Pay Review Body Occupations.