Austerity and class war in the UK
The UK’s poorest families are facing the tightest income squeeze of any group due to higher rates of inflation and lower wage boosts, according to new analysis of official figures conducted by the Trades Union Conference (TUC).
The bottom 10% of the country by income are facing effective inflation rates of 4.1% versus just 3.3% for the richest, while official Office for National Statistics (ONS) statistics from 2011 show the wages of the bottom 10% of earners rose just 0.7% compared with increases of 1.6% for the richest.
Taken together, the two measures suggest real wages for low-income families in Britain are falling twice as fast as those of their richer counterparts. In real terms, the bottom 10% of wage earners are 3.4% poorer than they were a year before versus a 1.7% drop for the top 10% year-on-year.
Some stuff on how the effective inflation rate for the UK is calculated:
The UK’s official measure of inflation, the CPI, stands at 3.5% and is calculated by measuring changes in prices of thousands of items from different categories: food, utility bills, recreation and more.
New research by the TUC has re-calculated this figure from 2010 to February 2012 using data showing how each group spends its money. Families in the bottom 10% spend a much higher proportion of their income on food and household costs such as utility bills than the richest 10%, and owing to lower levels of spending do not benefit nearly so much from smaller increases in recreation, clothing, restaurants and other leisure activities caused by the stagnant economy.
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