A certain commenter over at HPC insists that using National Insurance receipts to guesstimate a ten per cent fall in total real wages during the period April 2008 to April 2011 is completely wrong, and that we should use Average Weekly Earnings (see Historical Time Series, Regular Pay tab) and the Consumer Price Index.
OK. There's no figure for April 2011, so let's use March instead.
March 2008, AWE £408, CPI 106.7
March 2009, AWE £417, CPI 109.8
March 2010, AWE £424, CPI 113.5
March 2011, AWE £433, CPI 118.1
We then adjust AWE for the CPI deflator to express AWE in terms of March 2011 prices:
March 2008, AWE £451
March 2009, AWE £448
March 2010, AWE £441
March 2011, AWE £433
That looks like a real fall of exactly four per cent, which we can further adjust for a 1.2% fall in total employment (from ONS Labour Market Statistical Bulletin) which gives us a total real fall of just over five per cent, which, intuitively, seems closer to the mark than a ten per cent fall.
What have we wrought in the UK?
6 hours ago
6 comments:
5% would tally with the roughly 5% fall in GDP.
BE, sure, I was just trying a few different statistics to see how they tallied.
PS, a recession is two quarters of negative growth, one definition of a 'depression' is the period after a peak until we catch up with that peak again, i.e. if economy grows 1.5% for the next three years, the depression will have lasted six years.
"one definition of a 'depression' is the period after a peak until we catch up with that peak again"
If that were true, the first day of every recession would also be a depression. In fact, seeing as a recession is not called until we’ve had two quarters of negative growth, we'd be in a depression a month before we were in a recession
mw: you can’t adjust the fall in real average wages from 4% to 5% by applying the 1.2% increase in unemployment. The AWE represents eanings PER JOB (if I'm understanding what you are trying to do)
F: "mw: you can’t adjust the fall in real average wages from 4% to 5% by applying the 1.2% increase in unemployment. "
Well, that's exactly what I DIDN'T do.
I adjusted average wages for CPi to arrive at REAL average wages and then I adjusted REAL average wages by TOTAL employment to arrive at TOTAL REAL average wages.
I think I made that pretty clear.
The average wages number are PER JOB, you thick numpty. How long did it take you to work out that dis-informational, weaselly response? You made a mistake and as per usual, you will talk any amount of shifty drivel to disguise the fact. You really are acting more like a Dickensian oick every day. By the way, if you deliberately misquote me or get cheeky behind my back again, I will wring your scrawny neck.
F, yes, average wages are per job, which is why we would multiply them by the number of total jobs to get an idea of total wages paid out.
You yourself suggested this method on the other thread. I shall gleefully quote your comments 20 and 22:
"Average earnings are far from useless for your purposes. If you know the average earnings (openly published) and you know the number of people in employment (also openly published), then you know the TOTAL earnings... All I've got to do is multiply one number by another."
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