Income distribution has shifted over the last four years, according to Flip Chart Fairy Tales.
Most of the increase in employee numbers has come from lower wage jobs. Although the number of employees has increased, there are fewer people earning over the equivalent of £30,000 than there were in 2010 [these figures do not include the self-employed but would be even more heavy at the bottom end if they were].
The OBR expects wage growth to return next year although, as the Resolution Foundation pointed out, it has been saying that next year will be the year of the pay rise since 2010 [bolding mine].
The OBR doesn’t think it will be enough to stop us getting into more debt… Pay might rise, it says, but consumption costs will rise by more.
If the OBR is right, then, much of the economic growth over the second half of this decade will be based on debt fuelled consumer spending. The low pay of the early 2010s will be replaced by slightly higher pay and a lot more personal debt.
What could possibly go wrong?
Read the full article here.
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