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The TUC and, err, economics

Pay rises for the top 10% of UK earners, including City bosses, have clearly outstripped those for the rest of the workforce and been prime drivers of recent inflation and soaring interest rates, according to new analysis of official figures.


Analysis by the TUC of official figures also shows that workers among the top 1% of earners, with an annual income of at least £180,000, were paid 7.9% more than last year, up from 3.7% in January.

By contrast, those who are paid £59,000 a year saw the rate of their wage rises fall from 7.2% to 5.5% a year, while workers receiving £26,300 a year saw an even bigger fall in annual wage rises, from 9.5% in January to 4.7% in April.

Let’s assume that all inflation is from nothing but pay rises. Just to illustrate. Let’s also assume that inflation is 10%.

I get wrid results tryint to work this out but the £180k is top 1%, £59k is top 10% and £26k is median – or we could say the 90%. In the effect upon inflation the 7.9% for the 1% is obviously trivial against the 4.7% for the 90%, no?

So it’s not in fact true that the pay driven inflation is being driven by pay rises for the 1%. Cannot be – they’re 1%, recall?

12 thoughts on “The TUC and, err, economics”

  1. Strange, they seem not to have noticed that the average union leader is going to be in the top 10% and very probably in the top 1% of incomes. Must be an unfortunate oversight on their part.

  2. I would have thought there’s something else rather obvious & important. Inflation numbers are based on the sort of goods & services the general public consume. And thus there tends to be a limit on how much of them any individual consumes. So, irrespective of how much high earners are earning, they aren’t spending much more on them than the average consumer. High earners spend their ill gotten gains on things the general public don’t consume. In fact they may be spending far less on what the public consume than the average member of the public. The ratio increasing the more they earn. So their increased demand can hardly be feeding into the published inflation numbers.
    Of course there would be a secondary effect of the money from what they are spending their ill gotten gains on, via the members of the public who provide those goods & services, working it’s way into general spending as it’s spent. But are the TUC now against its members earning a living?

  3. Or to put in a way even a member of the TUC might understand.
    I am a high earner. I spend my loot on hookers & coke, champagne & take-away meals flown over from the finest Paris restaurants in my private jet. I do not shop at Tesco, whatever that is. Although the hookers, my coke dealer & my extensive staff might.

  4. bis, “In 2023, 26 items have been added to the basket for the Consumer Prices Index including owner occupiers’ housing costs (CPIH) and 16 items have been removed out of a total of 743 items”. ONS.

    Some of the items are rather odd to me – I mean i’m not sure how the price of a lawnmower or window cleaners fees affects someone living on the 14th floor of Nelson Mandela House, or ‘Domestic Cleaner’ and ‘Nanny’ fees for the vast majority of us who don’t (or can’t afford to) use either.

    At least they have got round to getting rid of “non-chart CD albums bought in store”.

  5. Mmmm.. The hookers do have some interesting outfits & provide extensive services but… My private jet in there?

  6. I thought this was interesting. It’s not on the same topic but the same sort of thinking’s involved.

    It’s about deep sea mineral extraction & who gets to benefit.

    The ISA’s (International Seabed Authority) defining goal is that we should all, one way or another, benefit from this journey into the new frontier. If and when extraction finally begins, each country mining in the high seas will have to share its royalties with every other country in the world – so honouring that “common heritage of mankind” clause.

    What royalties? We will all, one way or another, benefit from the minerals extracted. What more do you want?. Imposing royalties will just add to costs of extraction & come out in the market price of what’s extracted. The royalties then being squandered by which ever governments/NGO’s/whatever get their grubby paws on them. And of course we’re talking licences. So reducing the competition amongst those doing the extracting. Pushing prices even higher.
    It’s so fascinating to watch a gravy train being fuelled up ready to leave the sidings.

  7. Bloke in the Fourth Reich

    Still stuck in the classed past I see.

    I wonder what the average dwell time within the top percentile (earned) income is for most people. Now sure, very few unskilled people are going to ever end up in it, unless they create a new social media empire. However, I suspect a good 10% of workers, maybe even more, spend some of their career in that bracket. Most people a relatively short proportion of their career.

    Very few people will spend more than, say, half of their career in said bracket.

    Adolff, perhaps we could afford to hire more cleaners and nannies if the government didn’t take over 50% of our income to pay millions of people to do nothing.

  8. So the TUC is reporting pay rises January to January and May to May … taking the average to reduce the impact of volatile elements like bonuses and exceptional overtime pay on Bank Holidays, the average rise for the top 1% was 5.8%, for the next group 6.35% and for the median worker it was 7.1%
    You have to be innumerate, and/or a Guardian journalist to pin the blame for inflation on pay rises for the top 1% (who, incidentally have suffered a substantial cut in “real” terms in after-tax income).

  9. Bloke in the Fourth Reich
    ”perhaps we could afford to hire more cleaners and nannies if the government didn’t take over 50% of our income to pay millions of people to do nothing”

    This was Auberon Waugh’s argument, that those with high incomes have always funded those with low, but in the old days they used to get a bit of domestic work out of the arrangement, whereas now it’s all done through tax and welfare.

  10. The people in the top n% of incomes are likely to have had larger-than-average rises in income, because some proportion of them will have been the lucky ones whose income rose enough to not be in the top n% last year, but to be in the top n% this year. Similarly those whose income dropped enough that they are no longer in the top n% will not be counted.

    A more useful statistic would be to see what rises/falls were experienced by those in the top n% last year

  11. @ Flatcap Army
    Tax *and benefits*. Basic state pension went up 10.1% in 2023, my occupational pension went up 2.7%. The guy on £180k which on average went up to £190880 has 5.2% more after tax, the guy on £59k up to £62746 has 4.7% more after tax and the one on £26,300 rising to £28,167 has 6.3% more after tax.
    They are all worse off after adjusting for inflation, unlike those on UC or basic state pension.

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