The Cost of Living Crisis continues

Lesley Brennan

18 October 2013

Figures out this week support Ed Milband’s focus on the cost of living crisis as a major political issue.

Firstly, the graph below from the Resolution Foundation analysis of Office of National Office of Statistics data shows that real average weekly earnings in 2013 ( taking inflation into account) are at their lowest in the period since 2001.

Secondly, James Plunkett of the Resolution Foundation indicates that despite the talk now of an economic recovery, the gap between wages and prices is now greater than it was a year ago.

Thirdly, snapshot monthly figures from Eurostat indicate that the UK now has the highest inflation rate in the European Union of 2.7 per cent

In the year to August , wages rose by a mere 0.7 per cent compared with a rate of inflation of 2.7 per cent , indicating once again that wages are falling in real terms by not keeping up with inflation.

Last month Labour’s Shadow Treasury Minister Cathy Jamieson revealed that average wage rises have failed to keep up with average price rises in 37 out of the 38 months since David Cameron’s Tory government took office .

The one month in which average wage rises exceeded average price rises was April of this year, and that was because bankers timed the cashing in of their bonuses to coincide with the new tax cut for the wealthy that the Tories introduced.

While millionaires are enjoying more than £100,000 from the cut in the top rate of tax, it has emerged that 4.8 million workers in the UK earn less than the Living Wage (  £7.45p per hour)

The majority of new jobs ( 60 per cent) created in the UK since the Tories returned to power in 2010 has been in the traditional sectors of low pay.

These figures demonstrate why the Tories’ economic recovery is one that is by-passing millions of workers and their families.

Economic growth should see living standards rise; instead the cost of living crisis is the backdrop of daily life for the millions amongst the” squeezed middle “ in society and the millions on low incomes.

 

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