Does anyone actually believe this nonsense?

For most people in the West, wages and living standards have stagnated for decades. If you were a factory worker in the north of England in 1970, for example, odds are good that your children will earn less in real terms than you did 50 years ago. The same is true for workers elsewhere in Europe and in the United States, an economic reality that is partly responsible for the rise of populist politics.

Seriously, real wages – that is, living standards – are the same now a for a factory worker in 1970?

Does anyone actually believe this shit?

53 comments on “Does anyone actually believe this nonsense?

  1. It’s implausible – real wages overall in the UK have risen a lot and while much of the wage growth has been in the south, it’s also where the cost of living has risen the most. I suspect you might manage to get that result if you looked at nominal Northern factory worker wages and deflated by national RPI and then assumed the current median wage in the North represented the salary of the children. (There’s a compositional effect in there as well).

  2. “Lower productivity growth has meant reduced living standards”

    He doesn’t understand the difference between a number and a change in that number. Growth is lower, but it’s still growth.

  3. Its theoretically possible I guess if you compared a unionised skilled factory job in 1970 with a minimum wage job today. However that won’t take into account the fact that todays minimum wage earner has considerably more State benefits available to claim that wouldn’t have been available to the worker of 1970. If you’re merely comparing market wages without State assistance then you’re not getting a true comparison as to what level of income people are achieving today vs then.

  4. “However that won’t take into account the fact that todays minimum wage earner has considerably more State benefits available to claim that wouldn’t have been available to the worker of 1970.”

    Is this an improvement?

  5. “Is this an improvement?”

    Thats a political question, not one of statistics. Yes it might be a better if people were paid more for their efforts and not by the State, however if we want to compare what the living standards of workers are over time we must take into account the tax and benefit system, and compare their household income after those changes are made, not before.

  6. If real wages have truly stagnated or fallen, how come all these people can afford the cars (often multiple per household), the foreign holidays, the designer electronic bling, gym memberships, etc etc.

  7. Does anyone actually believe this nonsense?

    Sadly, yes. Many people believe that living standards have fallen, that millions would starve if not for food banks and that we have only 48 hours to save the NHS.

  8. “If you were a factory worker in the north of England in 1970, for example, odds are good that your children will earn less in real terms than you did 50 years ago. ”

    Because they are probably not employed as “factory workers” any more.

    The handful of factory jobs that have lasted there are either insanely high tech/automated, unionised, or protected by law or contracting from any form of external competition (E.g Defence contractors.)

    The factories such as they are are also often “legacy” sites, where if the company was expanding/setting up a new plant, and were paying premium wages, they would not in a million years select that location today.

    Rolls Royce has a factory in Barnoldswick for no modern reason, simply because it was where Frank Whittle could use unbombed factory space. David Brown gearboxes is based in suburban Huddersfield because it is where it’s owned grew, MBDA missiles, are based in Oldham, of all places, but they all employ a fraction of what they probably used to.

    If low skilled “factory work” exists at all, it is quite possible it really does just pay pence above the minimum wage and nothing more, because there is no reason to locate it there other than for access to a low cost workforce.

    Huge numbers of mid-level “factory jobs,” that paid a steady wage really are just gone, either overseas or entirely, due to automation or irrelevance.

  9. I can actually remember working in the largest factory in Europe 52 years ago, albeit not on the factory floor but in a shared office. £6 a week which was ample as my parents housed me and fed me – that was £108 in today’s money according to the BoE inflation calculator, so < £3/hour (37.5-hour week for office staff vs 40 hours for shop floor).
    I cannot remember what any of the guys on the shop floor were paid but I am totally certain that it was less 'cos ICI was trying to attract us (three local lads with relatives working for ICI who had got into Oxbridge to read Maths so might be quite good at it).
    No-one earns less than £3/hour these days, not even in the Leicester garment factories "exposed" by the FT.

  10. Dunno. I’m sure Tim’s right, but something has gone badly wrong with what Steve Sailer calls affordable family formation.

    A 1970’s factory worker could probably afford to support a housewife and three or four kids. Seems only wealthy people and Jeremy Kyle guests can do the same now.

  11. As someone who was around in the ’70s – a packet of fags and a couple of pints on Friday night – current living standards are of a different order. Not least, I might add, due to wealth distribution – benefits, if you like – that afford the bottom 20% an enviable standard of living (to many people around the world). Perhaps not enviable in comparison to the UK’s top 20%, but differentials between top and bottom are narrowing.

  12. Conversely, despite having to borrow £20 from the mother-in-law in order to buy a round of drinks at my own wedding reception, I was still able to obtain a mortgage and borrow the 5% deposit from my bank manager, in order to buy our first home – a newbuilding semi-detached.

  13. @ Steve
    That is because kids (not my kids but my sister-in-law’s kids) demand a new iPhone every year. When the eldest wrote-off his car (apparently black ice) my mother-in-law offered to lend him £3k to replace it as long as it wasn’t a BMW where the insurance would cost more than the car – and he threw a strop. He now has a second-hand Merc (I don’t know how, but I suspect my sister-in-law). I was twice his age before I bought my first car and, apart from one during school holidays) never had a job as low-skilled as his.

  14. There is probably some truth in the idea that people feel worse off because the government helps itself to so much and pisses it up the wall, plus insists on endless idiotic regulation which makes things cost more than they should such as housing.

    Also what Steve said although there’s an obvious caveat which is the standard of living which one aspires to give to all these kids.

  15. @ Bernie G
    In the old days, the bride’s parents normally paid for the wedding and reception. I told them that I was going to pay for mine (so that I could decide who was on the invitation list – relating to a problem that I had encountered more than a decade before I met them).

  16. @ BiI
    It’s the standard of living which is deemed “normal” that is the problem. The Joseph Rowntree Trust insists that the unemployed should have a standard of living higher than I enjoyed as a middle-class kid

  17. This is believed by people under 25 (who just believe what they are told), and those who stand to benefit from the expression of the belief.

  18. Follow HumanProgress on Twitter

    They shove some lovely data right in your face:

    ‘Globally, a worker could expect to work 2,227 hours in 1950. By 2016? Only 1,855 hours. That’s a decline of 17 percent. Over the same time period, global inflation-adjusted income per capita per year rose from $11,578 to $24,400, or 111 percent.’
    Or
    ‘A worker on the average wage had to work 508 hours to buy a 15″ color TV in 1954. In 2014, he needed to work only 7.8 hours to buy a 50″ high-definition TV, a far better product. That’s a price reduction of 98.5%. Explore other price changes over time: buff.ly/2Idhu6t’

    You can look at anything:
    Female education
    Life expectancy
    Poverty reduction in Africa

    Always the same story

    Anyone who believes we are not better off now than any time in the past is &@€¥£$ stupid.

    Of course the Cato Institute is behind it so they must be fascist lies!

  19. It’s Marion Tupy behind that site. And as I know and like him I approve this message.

  20. My smartphone in 1970 was bloody awful. It was the size of Jodrell Bank and I had to pay the GPO £24000 a week for the service.

    Anyone peddling these lies is up to no good. It’s so obviously at odds with reality that it can only be axe-grinding of the most pernicious type. I didn’t go abroad on holiday until I was 12 in 1982. These days my nephews and nieces and their kids zoom off to Florence or Kos or Orlando three times a year.

  21. “If you were a factory worker in the north of England in 1970, for example, odds are good that…”

    You didn’t have a car, fridge or freezer, a telephone, a colour TV, central heating, a foreign holiday, meals out….

    Also, 40% lived in a council house/flat.

    Obviously, that was a better living standard if you’re a socialist.

  22. “A 1970’s factory worker could probably afford to support a housewife and three or four kids. Seems only wealthy people and Jeremy Kyle guests can do the same now.”

    Chances are you could live exactly the life of a 70s factory worker today, as long as you actually lived like a 70s factory worker. Ie no car (rode bicycle to work or took bus – as an aside I remember the car plant in my home town in the 70s, at knocking off time the workers all came out on bikes, now its a stream of cars), took one holiday per year, to somewhere like Blackpool, one small colour TV, a radiogram perhaps, grow your own veg in the garden or allotment, repair all domestic appliances rather than buy new ones, do all your own home and garden maintenance (and car if you were doing well enough to have one), no eating out all the time, cook your own food, repair your clothes etc etc. Oh, and maybe a GPO phone if you were posh, otherwise down the street to the phone box. All the money saved by living like that today would allow you to buy a very nice house of similar size and standard to the mythical ‘well off’ 70s worker. Of course it would have to be a house with no double glazing, no insulation, and a pretty basic hot water system, possibly no central heating either.

  23. Incidentally recently I’ve watching old episodes of ‘Whatever happened to the Likely Lads’ which cover this exact 70s period and Northern location, and its noticeable that Bob (Rodney Bewes) is portrayed as the one who has ‘got on’ in life with his white collar office job, and therefore can afford the new house on a new estate and the Vauxhall Viva car on the drive. Whereas Terry (James Bolam) is the staunch working class lad who is portrayed as working in all manner of basic jobs, lives with his mother and has no car. So not exactly living the high life, and presumably the characters were representative of the society that existed at the time.

  24. Back in the early 70s my mum worked in a factory local to where I am now. Just over £2 a week (she was of the female persuasion so probably not earning the same as the men anyway).

    Whats minimum wage full time take home these days? About £220 a week?

    Is the value of just over £2 from 46 years ago more than the value of £220 these days?

    I know single people on NMW who earn enough to have their own place. Was that possible back 46 years ago?

  25. In the 1970s as kids we had no central heating, single-glazed windows, a black&white TV with only two channels. Now, in my fifties, on minimum wage when I *am* working, I have central heating, double glazing, several computers, colour TV, more channels than I can remember, *and* a holiday flat with same again.

  26. Two things have remained or increased as costs – taxes and housing. Everything else, even food, has plummeted as a percentage of average earnings.

  27. What I remember is in 1968 earning under £8/week and paying a marginal rate of 8/6 in the pound, 42.5%

  28. Dear Mr Worstall

    How many IBM 360’s could a factory worker in the north of England in 1970 afford?

    How many IBM 360’s are there in an iPhone today?

    DP

    PS IBM 360’s didn’t come with internet connections at megabyte speeds (they did have dial up modems around 300 bits per second), GPS, megapixel cameras (one or more off), satnav, apps (whatever they are – never knowingly met one), multi-player games with high resolution graphics. They did need huge rooms with raised floors, multiple floor-to-ceiling air conditioners, multiple reel to reel tape drives for input and output, multi-platter 12″ disk packs and drives to go with them, 80 column card readers, card punchers, 360 lines per minute chain printers (6 chains and three or four printers with power operated acoustic hoods and vacuum suction to stop the paper reaching the ceiling), plus a staff of 120 plus feeding twin IBM 360’s with 128k RAM partitioned into 2 times 54k RAM – ferrite core – the hard stuff, and all sorts of ancillary bits and bob, including a staff canteen with one of them new-fangled microwave thingies. Turnover c £1.5 million in 1975 money.

  29. What’s the impact of women entering the workforce? Double the workforce, halve the income, or the complete opposite? Why? Logically, you’d expect the income to halve…

    Whatever has happened to income and living standards, I find it very difficult to avoid the conclusion that the near inability of single income families to exist now is closely linked to that doubling of the workforce. Something to do with the childcare cost while the woman does her strong, independent hobby job…

  30. Tim posted something on Twatter that had the Joseph Rowntree Foundation’s figures for required spending for their “minimum” standard of living.

    After rent, it was about £30 per day for a single person!

    Since you can feed yourself quite royally for £5 or less if you’re not an idiot, and gas/leccy aren’t *that* expensive, where the ever loving hell does that figure come from, and how many artisanal coffees in bijou london popup cafés are included in it?

  31. Chances are you could live exactly the life of a 70s factory worker today, as long as you actually lived like a 70s factory worker.

    I think the main obstacle would be persuading your family. Of course, living the 70s life, you could give them a clip round the ear if they complained….

  32. “Jim
    July 12, 2018 at 1:14 pm

    Its theoretically possible I guess if you compared a unionised skilled factory job in 1970 with a minimum wage job today. ”

    wat?

    And if you take the CEO of a major corporation and compare him to the average minimum wage worker of the 1970’s then the increase in living standards is several orders of magnitude.

    And doing either would be stupid.

    In any case, take the average minimum age worker today – who has access to the internet, central air, 500 cable channels, fresh fruit year round, a car, and better medical care and compare him to that unionized factory worker from the 1970’s – and the modern min-wage dude comes off with a better standard of living.

  33. I mean, shit – just look at normal tv shows from that era to see what was considered normal back then. Hotels where an in-suite bath was a luxury you had to arrange for?

  34. Looking at that commercial linked here – 200 pounds for a record player? Not including amp and speakers? Or records? They had it soooo much better back then.

  35. @EdwardLud: “…the near inability of single income families to exist now…”

    Plenty of them exist. Where that ‘single income’ is from the poor bloody taxpayer!

  36. @Steve

    “Dunno. I’m sure Tim’s right, but something has gone badly wrong with what Steve Sailer calls affordable family formation.

    A 1970’s factory worker could probably afford to support a housewife and three or four kids. Seems only wealthy people and Jeremy Kyle guests can do the same now.”

    But back then they had one telly which lasted fifteen years, thry ate out once or twice a year, they had a week or even a weekend in Blackpool for their holiday, they owned one small badly made car, their furniture and clothes included lots of hand-me-downs, the twin tub was second hand, mum darned socks, they had one or two pairs of shoes each etc etc

    You can still live like this and be fine but most people want bling and fortnights in Thailand, irrespective of their ability to pay for them.

  37. @Jim
    “Chances are you could live exactly the life of a 70s factory worker today, as long as you actually lived like a 70s factory worker. Ie no car (rode bicycle to work or took bus – as an aside I remember the car plant in my home town in the 70s, at knocking off time the workers all came out on bikes, now its a stream of cars), took one holiday per year, to somewhere like Blackpool, one small colour TV, a radiogram perhaps, grow your own veg in the garden or allotment, repair all domestic appliances rather than buy new ones, do all your own home and garden maintenance (and car if you were doing well enough to have one), no eating out all the time, cook your own food, repair your clothes etc etc. ”

    I think that you would have problems even doing that to afford the same house. Saying that apart from housing (and that is thanks to the Government) things are so much better today. Even in the 1980s I had a friend who didn’t have a phone at home!!!

  38. “What I remember is in 1968 earning under £8/week and paying a marginal rate of 8/6 in the pound, 42.5%” Was it, by God? Did that include National Insurance?

    Where’s an easy place to look at the history of our income tax rates and thresholds from (say) 1945 onwards? National Insurance too, ideally. I don’t want spreadsheets; simple tables would do admirably.

  39. @ Martin
    46 years ago as a single Oxbridge graduate with a professional qualification on a decent salary I couldn’t get my own place *because I was single*
    £2/week in 1972 is approx £25/week in today’s money – just over 3 hours work at NMW

  40. Hmm,

    I vaguely remember the 70s. Parents had a modern house with a (crap) TV, double glazing and lots of stuff. No phone though (walked on Christmas Day to the GPO box to call the grandparents.)

    Foreign holidays? First one was in the early 80s.

    Two workers, but two kids at public day school. My mother really resented paying for a worse education than she got at her Grammar but …

    I wouldn’t go back. And not only because my job wasn’t even conceived of then. Although, what was a junior Lt Col paid back in the day?

  41. I mean, shit – just look at normal tv shows from that era to see what was considered normal back then

    Though there was some truly excellent drama from that era, adaptations such as “I, Claudius”, “Smiley’s People” etc which you won’t find the equivalent of today, if only because scriptwriters these days are instructed to make everyone sound like Danny Dyer in Eastenders.

  42. We had a telephone installed in 1982, got a car in 1985 or 1986. ‘Abroad’ was something you saw occasionally on TV. Food costs were probably a larger part of your outgoings than rent or mortgage. ‘Restaurants’ were as exotic and proximate as Buddhist temples in Cambodia.

    The majority of the population today insists on middle class standards of living, and modern standards not 1970s standards. That’s the issue here. That’s why people think they are poorer.

  43. @ dearieme
    There was a quirk, a slightly lower rate for earned income, but if you signed a Covenant to pay some money to a charity, you had to pay 42.5% on that money

    Why?

  44. @ Rob
    Of course people insist on middle-class standards of living because most of us are middle-class.
    That is one of the great achievements of MacMillan and Thatcher – SuperMac raised the income of the poor so much that an OAP was bettter off than he had been working under Attlee, Thatcher transformed the nation so thas most of us had capital.

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