How to prove that average wages have risen over the decades

1) Income tax used to only bite at about average wages.

2) Income tax now bites at part time working on minimum wage.

3) Income tax thresholds have risen in line with inflation.

Therefore wages must have risen faster than inflation.

The fly in this ointment is that at least once cunts like Brown didn\’t even upgrade personal allowances by inflation. But it is still true that the successful deployment of fiscal drag by successive chancellors does prove that wages have risen faster than inflation.

13 thoughts on “How to prove that average wages have risen over the decades”

  1. The existence of the term “fiscal drag” makes the point on its own.
    Or you could just look around at the affluent society and what is considered a “necessity” – a recent opinion survey found that a majority of those asked considered a TV and a car among “necessities” for a household living on benefits.

  2. A computer is now dangerously close to being a necessity for somebody job-hunting. Having watched the daughter at it last year.

    Of course, there are internet cafes and even the odd library around so it doesn’t need to be “your computer”.

  3. SE, computers are also quite cheap these days. Leaving aside mobile phones, a decent netbook can be had for about £230, which is less in real terms than my folks paid for my 16K ZX Spectrum in 1983 (£99.99).

  4. About 1/3 the price of the Speccie in real terms. And it’s under gbp200 for a crappy netbook that can nonetheless run WinXP in a slightly wheezy fashion.

  5. Both true, gents. But a TV is cheaper yet? £96 from Tesco Direct (with a built in DVD player.)

    Of course, the TV doesn’t include the licence and the netbook doesn’t include the necessary internet connection but, hey …

    Anecdote: my first 9-5 job was (mostly) repairing Spectrums.

  6. Income tax thresholds were only automatically uprated in line with inflation from the late 70s onwards, which allowed stupendous fiscal drag before then.

  7. Given the frequent complaint that the headline rate of inflation is smaller than “real” inflation experienced by people, I think your argument rather begs the question.

  8. @ H and Sam
    Tim is not looking at just the past 15 years during which median real incomes have risen negligibly, if at all (Sam is right because a change in the mode of calculation of RPI understated inflation from 1997 until 2011 when it was corrected by somewhere in the region 0.3% pa to 0.6% pa) but over “decades”; I am looking at the past 60 years since I was at primary school with boys with patched shorts. Fifty years ago my father’s employer (a very large firm) had a staff car park, a separate senior staff car park and a senior staff cycle rack for those senior staff who did not own cars; it also paid for works buses, run by the municipal transport department, to take workers to and from the factory. Foreign holidays were a luxury; most men had one suit and two pairs of shoes; eating in a restaurant was a luxury (but fish and chips, with greaseproof separating the food from the old newspaper was good value); most people did not have a car, or a telephone in the house, or central heating (when I encountered central heating when I was 29 I found it most uncomfortable); PCs did not exist, so kids played outdoors and obesity was a rarity.
    If you look at historic inflation rates, you will see that there was negligible fiscal drag in the 50s and the early 60s.

  9. From the outside – do old age pensioners really have TVs, a car etc in the UK?
    Or does all the above only apply to real people.

  10. @ john malpas
    I can’t answer for all of them but almost all the ones that I know do. In fact pensioners feel a greater need for each of them than younger people.

  11. SE, one can get an internet connection by nursing a cheap drink in Wetherspoons for a couple of hours. As for the TV licence, well, if one buys a cheap USB tuner from a Chinese eBay seller, I doubt they’re going to report the sale of it and your address to the TVLA. Not that I’d suggest doing so, as that goes against the letter of the law for so long as it exists.

  12. …and, of course, one can watch iPlayer, 4OD, ITVPlayer et al free and legally (as long as it’s not live) if one has a computer and internet connection.

Leave a Reply

Your email address will not be published. Required fields are marked *