Daily Management Review

Millions Of UK Households 'Worse Off' Compared To 15 Years Ago


07/24/2018




Millions Of UK Households 'Worse Off' Compared To 15 Years Ago
A new research from the Resolution Foundation indicates shows that compared to their condition 15 years ago, the conditions of millions of "just about managing" families have barely changed in the UK.
 
The conclusion that the global economy has failed to create ways of income for people over many years despite the number of working people reaching a record level can be drawn form this very significant income stagnation for so many.
 
Typically, £14,900 was earned by households on the lower half of incomes in 2003. The research showed that figure had gone down to £14,800 in 2016/17.
 
Both figures are adjusted for inflation and housing costs.
 
The report fur5tehr notes that the number of low and middle income households is more than over eight million and almost 50 per cent of them have children.
 
And the pay squeeze is not being faced by the poorer households only.
 
For the year 2017/18, the average increase in income was 0.9% which is the lowest increase in pay in the last four years and it is also lower than half of the average raise in income between 1994 and 2007.
 
There was actually a drop of £150 in the last year for the poorest third of the households.
 
While about 40% of households in the low to middle income category believe that they would not be able to save £10 a month, about 35% of them would not be able to afford a holiday for a week with their children, found a survey, the Resolution Foundation report said.
 
"We appear to have a picture of generalised stagnation for many, with lower income households actually going backwards," the Resolution Foundation's Living Standards Audit says.
 
"The apparent falling away of the bottom from the middle in 2017/18 represents a disturbing new development.
 
"This pattern has clear implications for poverty - captured by the number of people living in households with incomes below 60% of the median [the middle figure of a set of income figures ranked from high to low].
 
"There are good odds that 2017/18 delivered a notable increase [in poverty].
 
"Relative child poverty may have risen to its highest rate in at least 15 years, despite high levels of employment."
 
"Child poverty" is calculated by the number of under-16s living in a household that earns less than 60% of the average income.
 
The questions that arise are the reason for income stagnation in eth UK and what are the remedies.
 
There was hardly any wealth created by the economy for the people in work, found the research by the Foundation on the "why".
 
Many of the lobs pay little even though the rate of employment is high. this is because jobs at the lower spectrum of the payment are taken up by people who are moving from unemployment to employment like single parents.
 
And there is very little progression into higher paying jobs once such people take up such jobs.
 
In terms of solutions, economists say that there should be enough encouragement for people to apply for promotions once they enter a job by increasing their skill sets and ultimately their pay package.
 
(Source:www.bbc.com)






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