I can't find actual official statistics for total wages paid out every month, so as the closest proxy, let's use monthly National Insurance receipts from April 2008 to April 2011 as published by HM Revenue & Customs, subject to one adjustment*:
Ho-hum, that's as clear as mud, so I made two further adjustments:
1. I smoothed the monthly receipts, i.e. April receipts are on average 13.5% higher than in other months, so they were adjusted down by a factor of 100/113.5 and so on.
2. I downloaded the RPI figures from the ONS and rebased everything to April 2011 prices.
There, that's a lot clearer, isn't it?
* I adjusted the original April 2011 figure because the effective main rate of NIC increased from 23.8% of wages to 25.8% (ignoring the very high earners, for whom it increased from 13.8% to 15.8%, and ignoring the increase in the thresholds), so I reduced the original figure of £10 billion by a factor of 23.8/25.8, so as not to overstate increase in headline wages. Employee's NIC went up from 11% to 12% of headline wages, i.e. people's net income went down from 89% of headline to 88%, so I reduced the figure by 88/89, seeing as we are only using NIC as a proxy for real wages.
Christmas Day: readings for Year C
8 hours ago
15 comments:
Thanks Mark.
I've been looking for something like this.
EK, I'm here to inform and entertain.
This is also reflected in what Max Keiser was going on about earlier.
When you factor is how debt was used to pretend people weren't getting poorer (i.e. deduct change in debt from nominal GDP) things are worrying.
JH, MK is a top man but a bit of a self-publicist.
AC1, sure, during the boom years, mortgage equity withdrawal added 9% to people's disposable incomes.
Which would suggest that disposable incomes are down nearly twenty per cent in three years (which can't possibly be right - five or ten percent, yes, twenty per cent, no).
Why not? You can hide a lot through Q.E.
AC1, you can't hide anything with QE!!!!
All the UK version of QE does is turn long term government debts into very short term ones. That's all. QE is not the end of the world, it is not our saviour, it will not lead to inflation or deflation or change anything significantly.
This is very surprising.
Official statistics show average earnings up 5% over the last 3 years (though unemployment has gone up, I think employment has remained quite steady) :
http://www.statistics.gov.uk/downloads/theme_labour/AWE_Historic.xls
On the other hand, according to this chart (courtesy of HPC forum), GDP excluding government spending has been static or falling since about 2002.
http://www.goldmadesimplenews.com/wp-content/uploads/2011/04/UK-Real-GDP.png
Something's been making food rather more expensive...
Anon,
a) my chart is inflation adjusted (RPI inflation over the 3 years was about 9.5%.
b) NIC receipts, by definition, take into accounts changes in average wages AND the number of people in work.
I like that second chart, which could reconstruct fairly easy.
Is that chart correcting for government spending or government borrowing?
AC1, I'll give you a few minutes to think about your own question to give you a chance to delete it.
I think that's very English of you. Well done.
Good post too.
I meant the second chart link anonymous @ 21:02 posted
AC1, firstly, the chart is clearly stated to be GDP minus government spending.
Secondly, government spending, by definition includes deficit spending - and the deficit spending is only a small part of the overall spending, having risen from about a tenth to about a quarter of UK govt spending.
Thirdly, it's possible to have high government spending with a balanced budget (high taxes) which would not detract from the general principle. So country A might have high taxes and high spending and country B might have low taxes and medium govt spending - why would country B show a lower 'real' GDP?
Fourthly, according to Modern Monetary Theory, there isn't really such a thing as deficit spending - all government deficits do is dilute the value of "the pound in your pocket" or increase the "money supply" so is to some extent a red herrring.
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