Thursday, 24 November 2016

13 years of lost wage growth

We already know that since the global financial sector meltdown UK workers have suffered a catastrophic 10%+ decline in real wages (matched only by Greece in the developed world). Now analysis of Philip Hammond's Autumn Statement by the Institute for Fiscal Studies (IFS) has shown that UK workers look set for even more wage stagnation.

The boss of the IFS Paul Johnson described the latest figures as "dreadful" and pointed out that the woeful economic policies of the Tory government and the failure of David Cameron's Brexit gamble mean that real terms workers' wages will still be well below 2008 levels in 2021.

It's impossible to fully explain how much social and economic damage is going to be caused by this lost 13 years of wage growth.

It doesn't take a genius to understand the economics of demand. If people have money in their pockets they're more likely to spend it. If they suffer 13 years of wage stagnation thanks to Tory policies like ideological austerity, deliberate wage repression, the erosion of in-work benefits and attacks on workers' rights, then they're going to have less money to spend than they otherwise would, meaning less demand in the economy, and fewer stable well-paid jobs as a consequence.

The Tories have created a deliberate downward spiral in workers' wages 
and working conditions (unmatched anywhere in the Western world apart from crisis stricken Greece) and the economic fallout from Brexit is about to make this already appalling situation even worse.

13 years of lost wage growth, a £122bn Brexit
black hole, missed targets, broken promises ...
yet the Daily Mail present their readers with
this "Everything is Awesome" front page!
13 years of lost wage growth would be bad enough in its own right, but it's obviously even worse when you factor in things like soaring housing costs (continued unsustainable house price inflation and the ever inflating rents charged by the unregulated buy-to-let slumlord rentiers), constant above inflation hikes in public transport costs, post-Referendum inflation, and the increased cost of imports due to the collapse in the value of the Pound.

The astounding thing is that despite the six years of severe and sustained decline in their real terms wages that workers have already suffered under Tory rule, millions of ordinary working people continue to believe the propaganda in the right-wing press that the Tories are doing a great job of managing the economy!

People are apparently so susceptible to what the mainstream media tell them that they'll ignore the real evidence of their own lives, and the real evidence of the lives of the people around them, and choose to believe the ludicrous right-wing fairy stories about how awesome everything is.

The fact that we're undergoing the worst collapse in living standards since the Second World War makes me wonder when it was that British people actually lost their spines and became such a grovelling bunch of weaklings who are perfectly content to have a bunch of Tory toffs rob them blind for 13 long years with barely a whimper of complaint?

During the Second World War people accepted the sharp decline in living standards because they knew that their way of life was under existential threat from continental fascism. They put their all into defending our country, then after the war was won they demanded better for themselves, resulting in the foundation of the NHS, the construction of millions of decent affordable homes, the introduction of Legal Aid and the longest sustained improvement in living standards in British history.

What is it about the current generations that we meekly accept a similar decline in living standards to the Second World War when there is no existential threat like Nazi Germany to justify it?

When did the British public become such a weak and docile bunch that they'd accept being robbed blind for 13 years, while the Tories and the right-wing press tell us a pack of ridiculously unbelievable lies about how great everything is?

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