Power To The Workers

The Governor of the Bank of England, Mark Carney, recently lamented Britain's "first lost decade" since "Karl Marx was scribbling in the British Library" in the 1860s. He was referring to the fact that wage growth for the average British worker has stagnated in the decade since the financial crisis.

Last year earnings for the median worker in the UK, the person in the middle of the wage distribution, were almost 7% below their pre-recession level in real terms. The latest official forecast shows that real earnings are unlikely to return to pre-recession levels until 2021.

The recent weakness of real earnings has exacerbated the much longer-running shrinkage of labour's share of GDP. Since the early 1970s the share of GDP paid in wages has fallen, while the share going to profits has risen.