Wednesday, 2 May 2018

"Real Wages Are Up"?

Let Josiah Mortimer set you straight:

A raucous PMQs today, with the government still shuddering over the Windrush affair and Amber Rudd’s resignation. 

It was left for the PM to try and dig up some positive stats, after Jeremy Corbyn raised the awkward fact that the UK economy has slumped to its slowest growth rate for over five years. And while Tories struggled to shout over him, there was no avoiding the question for May. 

In response, the PM strained to defend her economic record, claiming that ‘real wages are up’ – while Corbyn hit back with ‘four facts about the economy’: “More people in debt, more people using food banks, more people sleeping on our streets, more children in poverty.”

But pundits let slide May’s comment that ‘real wages are up’. It is, when you look at it, laughable. This is from the Office for National Statistics: “Comparing the three months to February 2018 with the same period in 2017, real AWE (total pay) rose by 0.1%, compared with a 0% change in the three months to January 2018.” 

Real wages are up by 0.1% – an improvement from 0.0%. We are looking at long-term wage stagnation. If the PM sees fit to boast about this in PMQs, there is something deeply wrong with our economy.

Indeed, real wages still haven’t reached pre-crash levels, as this graph from FullFact demonstrates:

The simple fact is: we are at the bottom of the pile in developed economies when it comes to pay growth. 

There’s another figure which goes hand in hand with this. Figures released last Friday show that Britain’s economy is still scarily weak. The UK economy saw just 0.1% growth in the first quarter of 2018, according to Office for National Statistics analysis.

Don’t be fooled by claims of an economic turnaround.

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