Socialist Worker

Living standards fall – it’s official

Inflation and interest rates rise while wages slip | Cost of electricity soars by 27 percent, gas by 38 percent

Issue No. 2028

Graph of relation between wage and price increases

Graph of relation between wage and price increases


Official statistics show that average living standards are falling for the first time since Labour came to office in 1997.

The latest figures show prices up 3.7 percent, according to the RPI index, and earnings excluding bonuses up by only 3.5 percent. The last time the RPI exceeded earnings growth was in 1995, in the dying days of the Tories.

These dry numbers reflect what millions of workers feel in their bones—that the cost of everything is going through the roof and wages aren’t keeping up.

Official inflation figures don’t reflect reality. For example, in the last year electricity prices soared by 27 percent and gas went up a whopping 38 percent.

And there’s more bad news as well. Interest rates rose recently, pushing up mortgages. One more rise in interest rates, to 5.25 percent, would mean that the average mortgage payment is 14.6 percent of average disposable income. That’s similar to the level that caused so many repossessions in the early 1990s.

Unemployment is now at its highest level since 2000. And more people who are working are being forced into jobs that pay less.

The number of people in full-time work actually fell by 15,000 in the last three months, and the number of part-timers rose by 70,000.

The collapse of Gordon Brown’s “miracle economy” means workers have to step up resistance.

And some are already fighting back, like the JJB Sports workers in Wigan, who this week celebrated success through strikes, and the 2,500 Metroline bus workers in London who are striking for decent pay.

More on Metroline: Striking bus drivers tell of long hours and low wages

More on JJB: JJB workers win their fight over pay and equality


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News
Sat 25 Nov 2006, 00:00 GMT
Issue No. 2028
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