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Thursday, 28th July 2011

UK: Missing out: Why ordinary workers are experiencing growth without gain

Source: Resolution Foundation (UK)

From Executive Summary:

It is a central assumption of modern, democratic economies that economic growth leads to rising living standards for the great majority of people. Now, evidence is emerging that questions that assumption. Median wages in the UK were stagnant from 2003 to 2008 despite GDP growth of 11 per cent in the period. Similar trends are evident in other advanced economies from the US to Germany. For some time, the pay of those in the bottom half of the earnings distribution has failed to track the path of headline economic growth.

If a central goal of government is to secure a new period of rising living standards then these trends point to one of the great economic challenges of our time: the need to restore the link between economic growth and the pay of ordinary working people. That challenge raises a number of immediate questions. Which factors decide whether the pay of ordinary workers rises when the economy grows? How have these factors changed over time in the UK? How have changes in the UK’s industrial make-up affected these trends?...

Economic growth is most commonly reported in terms of gross domestic product (GDP), which measures the value produced – in terms of goods and services – by all firms and workers in the nation. Therefore, if all else remains equal, the pay of ordinary workers rises in line with the value generated by economic growth. But if the distribution of the added value changes of over time – if it moves from one group of recipients to another – that relationship may weaken.
Over the past three decades, this is precisely what has happened in the UK. In 1977, of every £100 of value generated by the UK economy, £16 went to the bottom half of workers in wages; by 2010 that figure had fallen to £12, a 26 per cent decline.

+ Direct link to document (PDF; 1.3 MB)



Having begun his career in academic libraries, Adrian Janes has subsequently worked extensively in public libraries, chiefly in enquiry work as an Information Services librarian. In this role he has had particular responsibility for information from both the UK Government and the European Union. He wrote a detailed report on sources for the latter which was published by FreePint in 2007, and has contributed articles to FreePint and ResourceShelf. He is involved in training in information literacy and the use of online reference resources.

A Contributing Editor to DocuTicker, he also write reviews for Pennyblackmusic.

More articles by Adrian Janes »

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