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It mostly covers my work as UNISON Scotland's Head of Policy and Public Affairs although views are my own. For full coverage of UNISON Scotland's policy and campaigns please visit our web site. You can also follow me on Twitter. I hope you find this blog interesting and I would welcome your comments.

Friday, 1 July 2011

Middle income levels

An article by Chris Giles in the Financial times this week  'Spectre of stagnating incomes stalks globe' deserves a wider audience.

His key point is that most citizens across the globe are suffering from, at best, stagnating incomes;

"Fork-lift truck drivers in Britain could expect to earn £19,068 in 2010, about 5 per cent lower than in 1978, after adjusting for inflation. Median male real US earnings have not risen since 1975. Average real Japanese household incomes after taxation fell in the decade to mid-2000s. And those in Germany have been falling in the past 10 years."
 
This was to a degree masked by the property boom that allowed the middle classes to borrow. However, most countries have shown an increase in per capita income. So where has the money gone? Answer, to the very rich. It started in the USA and has now spread to Europe even allowing for progressive taxation and benefits;
 
"The Organisation for Economic Co-operation and Development found increasing income inequality between the mid 1980s and late 2000s in 17 out of 22 advanced economies for which it had sufficient data."
 
Exacerbating this trend has been a decline in demand for mid-range jobs.
 
"Across advanced economies, the labour market is becoming polarised into “lovely jobs and lousy jobs”, says Alan Manning, a professor at the Centre for Economic Performance at the London School of Economics. Between 1993 and 2006, the proportion of jobs with middling pay fell, while high- and low-paid employment rose."

The revolution in communication technology has allowed graduates with these skills to expand sales and the financial sector to gamble with other peoples money. At the bottom of the income scale technology is largely irrelevant to jobs like cleaning and caring. Routine but middle skilled jobs are being squeezed.

Giles concludes:

"It is no fun to be a fork-lift truck driver in a world of automated distribution warehouses. That shows in middling jobs and wages. And since the middle decides elections, it will also weigh on the minds of politicians."
 
Very useful article that flags up an issue that has been given insufficient attention. To this I would add that organisations in the public and private sector  are reorganising many traditional middle skill jobs out of existence. So it is not only wages, but real jobs that are on the line. This has implications not only for the workplace, but for wider society as well.

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