Extract from an article by David Kingman
David Kingman looks at the findings of a new piece of research into the living standards.
Since the “Great Recession” began in 2008, one of the biggest successes of the UK economy has been the so-called “jobs miracle”, which has seen the number of people in some kind of employment rebound to reach record levels.
By the end of 2016, the share of working-age adults who were looking for work but unable to find it hadfallen to an 11-year low of just 4.8%, or 1.6 million people. This represents a remarkable achievement because previous recessions have been followed by prolonged periods of high unemployment; it only requires a cursory glance at the situation in both Greece and Spain, for example, where the adult unemployment rates are stuck at 25.6% and 22.9% respectively, to realise the kind of potential calamity that the UK might have fallen into if things had worked out differently.
However, the jobs miracle does not mean that all is rosy in the UK labour market; a worrying trend that has taken place alongside the growth in the number of jobs has been the stagnation of average earnings, which for the typical worker are still below their pre-recession level. Most forecasts suggest that average earnings are unlikely to make a full recovery before 2018, so in other words the prospect of a “lost decade” of wage growth is now a very real possibility. One of the alarming impacts of this trend has been falling living stands among working-age families, developments that a recent piece of research has thrown into sharp relief.
Minimum income standards
Shortly after she came to office, Prime Minister Theresa May gave a speech which coined a lasting political neologism: the JAMs, or “just about managing” families. This appeared to refer to people who can be considered the victims of the economic trends described above – hard workers who feel they aren’t getting a fair deal in life because their wages aren’t keeping pace with the cost of living. However, attempts to quantify whether different households have adequate living standards face the problem of needing to produce some kind of agreed benchmark against which to measure what “adequacy” should mean.
The Joseph Rowntree Foundation attempts to answer this question by conducting an annual research project called the Minimum Income Standard (MIS) (designed in partnership with the University of Loughborough) which creates a benchmark by undertaking surveys of the general public to find out what they think is the minimum acceptable standard of living for different types of household. They then use this benchmark to assess how many households are successfully achieving the MIS and how this has changed over time..(continues)
SOURCE: David Kingman, “Record employment not helping working-age families avoid poverty, new research shows”, Intergenerational Foundation, 21 Feb 2017
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