Inflation drop doesn’t mean wages will rise

'For the privileged few': If you're earning the average wage of £26,500 per year, or less, then nothing George Osborne says will be relevant to you.

‘For the privileged few’: If you’re earning the average wage of £26,500 per year, or less, then nothing George Osborne says will be relevant to you.

Why are the mainstream media so keen to make you think falling inflation means your wages will rise?

There is absolutely no indication that this will happen.

If you are lucky, and the drop in inflation (to 1.7 per cent) affects things that make a difference to the pound in your pocket, like fuel prices, groceries and utility bills, then their prices are now outstripping your ability to pay for them at a slightly slower rate. Big deal.

The reports all say that private sector wages are on the way up – but this includes the salaries of fatcat company bosses along with the lowest-paid office cleaners.

FTSE-100 bosses all received more pay by January 8 than average workers earn in a year. Their average annual pay rise is 14 per cent. Bankers get 35 per cent. These are all included in the national private sector average of 1.7 per cent, which means you get a lot less than the figures suggest.

Occasional Chancellor George Osborne said: “These latest inflation numbers are welcome news for families.” Why? Because they aren’t sinking into debt quite as fast as they were last month? They’re great news for the fatcats mentioned above, along with MPs, who are in line to get an inflation-busting 11 per cent rise; but as far as families are concerned, rest assured he’s lying again.

“Lower inflation and rising job numbers show our long-term plan is working, and bringing greater economic security,” he had the cheek to add. Employment has risen, although we should probably discount a large proportion of the self-employed statistics as these are most likely people who’ve been encouraged to claim tax credits rather than unemployment benefits and will be hit with a huge overpayment bill once HMRC finds out (as discussed in many previous articles).

The problem is, Britain’s economic performance has not improved in line with the number of extra jobs. If we have more people in work now than ever before in this nation’s history, then the economy should be going gangbusters – surging ahead, meaning higher pay for everybody and a much bigger tax take for the government, solving its debt reduction problem and ensuring it can pay for our public services – right?

We all know that isn’t happening. It isn’t happening because the large employment figures are based on a mixture of lies and low wages. The economy can’t surge forward because ordinary people aren’t being paid enough – and ordinary working people are the ones who fuel national economies; from necessity they spend a far higher percentage of their earnings than the fatcats and it is the circulation of this money that generates profit, and tax revenues.

Osborne compounded his lies by adding: “There is still much more we need to do to build the resilient economy I spoke of at the Budget.” He has no intention of doing any such thing. He never had.

Conservative economic policy is twofold, it seems: Create widescale unemployment in order to depress wages for those who do the actual work and boost profits for bosses and shareholders; and cut the national tax take to ensure that they can tell us the UK cannot afford a welfare state, opening the door for privatised medicine and private health and income insurance firms.

This is why, as has been discussed very recently, leaders of the Margaret Thatcher era including Nicholas Ridley and Keith Joseph determined that the defeat of the workers would require “the substantial destruction of Britain’s remaining industrial base” (according to ‘The Impact of Thatcherism on Health and Well-Being in Britain’). It is, therefore, impossible for George Osborne to seek to build any “resilient economy” that will improve your lot, unless you are a company boss, banker, or shareholder.

The plan to starve the public sector, as has been repeated many times on this blog, has been named ‘Starving the Beast’ and involves ensuring that the tax take cannot sustain public services by keeping working wages so low that hardly any tax comes in (the Tory Democrat determination to raise the threshold at which takes is paid plays right into this scheme) and cutting taxes for the extremely well-paid (and we have seen this take place, from 50 per cent to 45. Corporation tax has also been cut by 25 per cent).

This is why Ed Balls is right to say that average earnings are £1,600 per year less than in May 2010, why Labour is right to point out that the economy is still performing well below its height under Labour…

… and why the government and the mainstream media are lying to you yet again.

Follow me on Twitter: @MidWalesMike

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16 thoughts on “Inflation drop doesn’t mean wages will rise

  1. jaynel62

    You’re correct and the key point for me is household “prices are now outstripping your ability to pay for them at a slightly slower rate.” – The Fact is they are STILL rising and will continue to do despite our social security now offering NO security at all!!

    Hope we survive ’til 2015!!

  2. jaynel62

    Reblogged this on jaynelinney and commented:
    Mike is absolutely correct here, the key point for me being household “prices are now outstripping your ability to pay for them at a slightly slower rate.” – The Fact is they are STILL rising and will continue to do despite our social security now offering NO security at all!!

    Hope we all survive ’til 2015!!

  3. Mr.Angry

    Well written article I can’t believe the UK public are being so hoodwinked nor can they recognize the continual lies being spouted on a daily basis. What is so daunting is I fear what they have done in these few years will take a long time to put right or reverse their corrupt policies. They are basically evil self serving dictators.

  4. Jim Round

    You know I’ve said it all before Mike but the Tories know exactly what they are doing, they will say growth forecasts are up:
    And unemployment is down.
    The problem is that more people take notice of these news stories than increased foodbank use, welfare reform failures and NHS meddling.
    Until this changes, nothing else will.

      1. Jim Round

        Unfortunately Mike, yes I am.
        As good as your blog and your commenters blogs are, readership is tiny compared to Mailonline, BBC News, The Sun etc…
        I made my main point just before Christmas, seeing retail parks with large queues of cars and people going in and out.
        Why would they care about rising food bank use when there’s a new TV to buy.
        Also, thanks to the likes of on benefits and proud etc… any claimant, genuine or otherwise are treated with deep suspicion.
        I could go on but I would be here all day and night.

      2. Mike Sivier

        I wasn’t arguing; I wanted to get a reaction from other readers – do they believe the mainstream media as much as (or more than) blogs on the social media? Do people who only get their news from the mainstream believe everything they’re told or are they sceptical about it after so many (let’s call them) inaccuracies.
        And what’s the solution?

      3. Florence

        Like all opinion, it’s a yes and no answer. Yes, the mainstream media are trying as hard as possible to put a government approved spin on it. No, because even the BBC couldn’t find anyone silly enough to say for their vox pop they felt “better off” than last month. Pay “rises” are annual, and price increases are constant and unrelenting.

        Also creeping impoverishment is now reaching up the wage scale, and even “old” Maggie tory voters among the working classes are now totally disgusted at what is happening. Even the pensioners, that the Tories think they have protected as part of their core vote, are now seeing the problems as users of the NHS, LA care services, and of course food prices. They are more likely to vote Ukip, but at least they will split the tory vote.. The better news is that millions now regret voting LibDem because they didn’t look hard enough to see they were now all orange book, yellow Tories etc., or believed they would actually put their manifesto polices into action. (e.g. Students).

        So IMHO, they can spin freely in the press, they can’t stop people actually seeing with their own eyes, and feeling in their own pockets, what the truth is.

        Of course, now we’re still all waiting for the opposition to actually take the mood and run with it. Ed Balls is still stuck in the NuLabour mode of trying really, really, hard to still keep the few middle class voters in sight, overlooking the millions of votes waiting to be inspired enough to actually, er, vote.

      4. Jim Round

        Trustworthy journalism would be a start, maybe a dedicated youtube channel, troulble is it would take time and money, most people do not have either.
        Those who are in work would be more concerned about earning a crust for themselves and any family they may have, that leaves the unemployed and retired.
        If someone who is unemployed were to start this it would simply start the “you should be looking for work rather than mess about with computers all day”
        Someone who is retired may not have the skills to set it all up.
        Student project maybe?

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  6. amnesiaclinic

    Reblogged this on amnesiaclinic and commented:
    Explains what is really happening instead of what the msm narrative of what is happening. This is exactly what is happening in America and makes me wonder if there will be any significant change after the next election.

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