Created: Wednesday, 05 December 2012 15:00
Written by Jack Edwards
The recent publication of the final report from the Commission on Living Standards, Gaining from growth, presents a detailed analysis of how the mass of the working class has suffered under the current crisis. It also shows, however, that downward pressure on working class living standards has existed for years, and has only been offset by a large increase in the number of women working in two-parent households, and by the system of working tax credits. With more women now facing unemployment, particularly if they work in the public sector, and eligibility for working tax credits being reduced, the outlook for many working class households is a rapid decline in real income. Jack Edwards reports.
The report looks at those who are on low to middle incomes, defining this group as working-age people living in households with incomes below the median but above the bottom 10%. However, it sets their situation within a context of growing inequality. From 1955 to 2001, incomes rose on average by 2.7% each year. From 2001 to 2011, however, this had collapsed to 0.6%. The ruling class has, meanwhile, grown richer: between 1997 and 2010 real income for the top 5% of earners increased by 29%, while for the top 1%, it rose by 56%. In 1979 the top 1% of earners had an income three times the average; by 2010 it had risen to 5.6 times. Share in total income for the top 20% of earners had reached 44% by 2011, more than the combined share of the bottom 60%.
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