A Living Standards Election?
Yesterday I noted that, by duration, the current 40 month long (and ongoing) squeeze in real wages is the longest since the 1870s. Today I thought I would try and cut the same data in another way.
Back in April the Resolution Foundation asked whether the 2015 General Election would be a ‘living standards election’ (some interesting slides here) and the chart below suggests it might be.
The chart* shows the change in average earnings in real terms in each Parliament since universal suffrage in the UK (including OBR forecast until 2015).
Given that Parliament’s are of differing lengths, one should be slightly cautious when looking at it – e.g. 1935-1945 looks so good mainly as it was a ten year period.
The key takeaway for me is this. 2010-2015 looks set to be the first Parliament since 1929 in which average earnings have actually fallen since the last election.
We really are in unchartered territory.
*For those really interested, 1929 to 2009 average earnings and CPI data are taken from the Bank of England’s ‘Three Centuries of Data’ spreadsheet, 2010-2012 are ONS and 2013-2015 are OBR forecasts.
The data itself is subject to two limitations – first it uses CPI rather than RPI (the picture using RPI is bleaker) and second it is a measure of average rather than median earnings – again the picture with median would be bleaker.
Finally in each case the data is yearend data rather than timed as to when exactly the general election occurred.
All calculations are mine.