We have recovered from the Financial crisis. Yes we have – it’s official. Well sort of, we currently have employment levels back at 2008 levels - 73%.
Whoopee, let’s celebrate, let joy be unconfined amongst the masses pop the champagne corks and...ehh hang on. If we have recovered why are so many of us so much worse off?
Well the reason is that while jobs numbers have recovered – wages haven’t. For most of us this is easily verifiable by checking the bank balance a couple of days after we’ve been paid and seeing what is left after the bills have come off. For anyone entertaining the idea that “It must just be me” – it’s not. The Institute of Fiscal Studies have just published a study of Earnings since the recession and it’s as cheery a read as you’d expect.
While this isn’t a happy picture for anyone – it is more severe for some sections of the workforce than others. Specifically young people have suffered most
There are a number of reasons for this decline in the value of wages. Frozen or almost frozen pay is probably the most obvious. But it’s far from being the only one. We’ve also seen a increase in part time contracts and zero hour contracts “under employment” in the jargon of economists.
Now it doesn’t have to be like this. Part of the reason for underemployment is a shortage of demand in the economy. This could be tackled through a policy of wage led growth.
Investment in public services could and should be an important part of this. With the promise of more austerity at UK level and tax cutting obsessed Government at Scottish level, this isn’t exactly the current agenda.
So you'll forgive us for not being exactly celebratory...but employment figures like this aren't the occasion for cracking open the champagne more like a can of Tesco value lager.