Profits Before Pay: Duncan’s Analysis podcast
It may come as no great surprise that since the financial crisis of 2008 many of us have experienced a wage squeeze, while the cost of living has gone the other way. However, as our own Duncan Weldon points out in a special programme he’s produced for Radio 4’s Analysis, wages for most people in the UK began stagnating years before the crisis.
We tend to think of the early 2000s as a time of relative wealth: house prices were rising, credit flowed easily, the government introduced a generous tax credit scheme and people generally felt better off. But these masked the reality of what was going on.
There was almost no wage growth for middle earners and below during the five years leading up to 2008 and yet the economy grew by 11% in that period. The overall share of the national income which goes into wages, as opposed to profits, has been decreasing since the mid-1970s.
Less of the economic pie is going into the pockets of ordinary workers. And of course, this means that a disproportionate amount of the economic wealth has been going to those at the top.
In his Analysis broadcast, Duncan asks why wages stopped rising in the years before the crash and what was the driving force for the squeeze?