The Hope of What Was Once Called a Decent Living Has Departed for the Average Household

Yves here. A cost of living crisis in the UK has crushed prospects for what was once called the middle class in the UK. Citi projects that in January, year to year inflation will exceed 18%. And remember that Brits, unlike Americans, are underhoused.

However, rentiers have squeezed Americans on other fronts like health care and higher education. And even though Americans may have more space, rents and home purchase prices are becoming less and less affordable. So even though the decay path for the UK middle class has suddenly gotten steeped, it’s not as if the US isn’t on the same trajectory.

Murphy posits this deterioration will shake up politics in the UK in a big way. For those living there: do you agree?

By Richard Murphy, a chartered accountant and a political economist. He has been described by the Guardian newspaper as an “anti-poverty campaigner and tax expert”. He is Professor of Practice in International Political Economy at City University, London and Director of Tax Research UK. He is a non-executive director of Cambridge Econometrics. He is a member of the Progressive Economy Forum. Originally published at Tax Research UK

I wrote an article for The Independent yesterday. The title they asked me to wrote about was ‘It’s now impossible for the average worker to live decently in Britain‘.

The article began with an exploration of data on this issue, which I felt to be important. Then, though, I moved to the politics:

If the average household once voted Tory, it was because they had aspirations for their children. They supported children with talent in sport, music or anything else. They helped those with coaching in subjects they struggled in. And they sent them on school trips, believing these were a key part of “getting on”.

All that is now beyond such families. The struggle to survive has tipped the balance for average-income households. Once they saw themselves, or their children, as being on the way to better things. This was the dream Thatcher and her successors sold them.

It was this hope of a secure life that might get better that defined “decent living”. Those in the upper two income quintiles already had it. Those in the bottom two were told by the snubs sent in the direction of all those who were either on or faced the risk of being on benefits that this was not a hope they could or should share. But the average household was supposed to have a home, a pension, a Ford, a holiday in the sun and access to advancement for their children within their grasp. This was what defined living decently.

That aspiration is now but a faded memory. Instead, the desperate hope is that all the essential household bills might be paid and Christmas might be afforded, somehow. Lurking in the background is the realisation that none of this might be possible and that inability to pay, insolvency and the insecurity that results from them are all a real possibility.

The hope of a decent living has departed for the average household. Fear is all that remains for those who once had hope. Forty years after politics abandoned the post-war consensus, our economy now fails the majority in this country. The era of living decently on average pay is over.

And that, I suggest, changes the whole political landscape.

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  1. c_heale

    As a Brit who grew up under Thatcher, in my experience the Brits that voted Conservative back in the 80’s were not driven by aspirations for their children. The working classes may have been, but the middle classes in my experience were driven by wanting to get as much for themselves as they could and damn the rest of the country.

    Many of my fellow students (at the end of the 80’s) wanted to and were encouraged to work in finance or accountancy, for one reason only – the money. Although this was also the time when the 2nd Summer of Love kicked off.

    I would say the students of 5 years before and 5 years after were far less driven by money for it’s own sake, than those who I graduated with. I still have friends from both those age groups.

    1. .Tom

      That period turned a lot of UK people for the first time into owners of real estate and securities. This was a critical part of Thatchers political game. I was one. I remember automatically receiving shares in my building society. Privatization was a feeding frenzy among the general public.

    2. tindrum

      Me too. I lived through the Thatcher recessions working in engineering (waste of time in the uK so I moved to Germany). Thatcher used marketing and slogans very effectively – “Winter of Discontent ” was a big driver and Stagflation from the early 70’s – all down to the unions of course (British Layland was just a huge joke by then). These simple messages and the aspirational “buy your council house” stories were very effective politically. She needed the Falklands war though to get re-elected. By then the gloss had come off, Milton-Friedman Monitarism was a bust and the poltax was a deadly mistake. However, the best engineering and physics gradates all ended up in the city and that has not changed to this day. Now the UK has no foundation of engineering or manufacturing and no way of getting it back. The links to the past are gone and Thatcher died not even knowing who she was or what she had done.
      What a country (to quote Lenny Henry).

    3. K Lee

      What is with this new separation of the middle class and the working class? They are one and the same.

      A healthy middle class has the freedom to care about social issues, which is what brought on the whole social revolution of the 1960’s. Suddenly, young people dared to enter the political arena to press their demands for a better quality of life… labor rights, environmental protections, food and consumer safety, healthcare rights, then later women’s and gay rights. And oh yeah, actually ending the Vietnam War. The daily chant outside the White House “LBJ! LBJ! How many kids did you kill today?” unnerved him so much, he did not seek a second term. Nixon was the last president to pass environmental laws due to people pressure so they made an example of him.

      The decision was made in the 70’s to carve away at the middle class in order to make people focus more on self-preservation rather than social issues (it didn’t work), which gave rise to the “me” generation of the 80’s. Workers were being squeezed and forced to become more competitive as capital flight and massive layoffs (remember Chainsaw Al?) caused labor breakdown in the US.

      Financialization and privatization were the west’s downfall. De-industrialization of first world nations is part of the Maurice Strong Sustainable Development agenda.

      1. eg

        K Lee, in The UK the terms “middle class” and “working class” do not map very well onto their American equivalents.

  2. Stephen

    I grew up in a working class family in Essex in the 70s and 80s. Most of the people in our road had moved out from council houses in north London and had been able to buy in Essex. That was real aspiration in those days. A Ford worker at Dagenham could buy a house and run a nice car in the way that the article describes. Even in the hyper inflationary 70s. We did endure power cuts, the 3 day week and candles though!

    If I wind the clock forward I think a big divide now is between people who own property and those who do not. Some of this is generational but not entirely. Most people who own houses have an asset that has appreciated heavily over the past couple of decades and feel wealthy. I realise that wealth does not equal income and does not fund current consumption but not having to pay rent or a mortgage frees up a lot of consumption opportunity and gives a cushioning effect. You feel you have a stake.

    But for anyone who does not own a house or is at the start of the mortgage payment journey then life feels much trickier. The house I grew up in was sold in 1988 for £75k. That was within reasonable reach for most people in the south east back then. Those same houses sell for £400k today, implying the need for an income of well over £100k (versus average income of £30k or so) to have any chance of being able to buy on a sensible mortgage multiple. In inner London even a modest home now costs over £1m.

    My instinct is that the big issue will now be the triple whammy of rising mortgage interest rates in a country where floating is still the norm, energy / food cost price rises and house price reductions affecting perceived wealth. We had similar issues in the early 90s, albeit with lower inflation rates. Main political result was the election of Tony Blair. The result of the earlier 70s drama was Margaret Thatcher.

    The big unknown is how bad this will get and whether we get the 70s or 90s style political outcome. Much of our “industry” now is service oriented or public sector. Much more than in the 70s or even 90s. There genuinely are a lot of non jobs in both sectors if we are honest. There are also whole industries based on froth such as PE and consulting. They employ some of the most articulate people in society and fund much of the other services such as coffee shops. Add to that political decisions that are likely causing the international elite to question whether London is a safe haven. So one can see lots of potential for drama. If these frothy industries get hit then I could see discontent that creates real change coming from elite groups. That change may not be in the interests of everyone else though.

    Others may have other better thoughts on this but net net I am deeply pessimistic.

    1. digi_owl

      “wealth does not equal income and does not fund current consumption”

      Yes and no. Wealth, in particular property and like, can be used as collateral for loans that can in turn fuel consumption. Yes, it is a dumb way of consuming but people will still do it.

      This is also how say Bezos or Musk gets things done. Use a portion of their wealth as collateral for a loan that they then use to buy yet more wealth, and off to the races they go.

      1. Stephen

        I agree. It is the classic “wealth effect” that is used to justify interest rates as a (clumsy and debatable) way to control inflation.

        1. digi_owl

          Only by focusing myopically on the demand side of the economy even as the problem is the supply side (empty containers piling up etc).

  3. Adrian D.

    I think Richard’s analysis is mostly accurate – at least for large parts of the UK and certainly where I live in Hove (very middle-class end of the City of Brighton & Hove, on the coast directly south of London). Rents for a 2-3 bedroom, one room wide, tiny-garden, terraced house here are upwards of £1,800 a month and raising fast.

    Most of those lucky enough to ‘own’ there homes are all likely on some kind of shortish term 2-5 year fixed mortgage deal with a large mortgage and will be in various states of anxiety regarding the remortgaging costs when they arrive. And that’s just the housing costs.

    As for it shaking up politics though I really don’t see this at all I’m afraid because The Establishment.
    Putting a little bit more meat on that bone, some of the problems are there:

    1. Keir Starmer. Brought to power in the Labour Party by the votes of well-meaning, but (IMHO) absolutely effing clueless, Remain-leaning Labour Party members this uber Establishment charlatan has since gutted the party of most of it’s funds, nearly all of it’s activists and every single one of it’s policies that might get us out of this mess. There seriously is no viable opposition in this country.
    2. The electoral system – first past the post will never allow any alternatives.
    3. The media – from the rabid tabloids to the utterly rancid BBC (and that really is no exaggeration – see their smearing of the OPCW whistleblowers & endless 2019 repetition of the Corbyn/Labour anti-semetism smears). Every economic issue is framed immediately in neoliberal terms- usually by the criminally, relentlessly, wrong likes of the Institude of Fiscal Studies (IFS) brought on to frame everything in terms of prudence, responsibility and magic trees. Any organisation, any viable extra-Parliamentary opposition or demonstrations will be traduced or simply ignored – whether in Europe (Dutch farmers, Yellow Vests) or at home. Whether or not you agree with the lockdown sceptics there were certainly a number of very large demonstrations here in the last year that received absolutely no coverage whatsoever.
    4. Brexit – ignore the supply-side issues (although IMHO the inevitable, tenuous JIT supply chains of the Single Market were going to tumble sooner or later) this issue will divert far too many ‘serious people’ from actions that could help right now (price-caps, nationalisation, organising workers) to those that won’t (rejoining the EU & doubling down on the ‘told you so’ hectoring of the under-classes).
    5. Division – Brexit isn’t the only area of political division in here – there’ll be a swathe (although less than our media may like to pretend) of people opposed to strike action & resentful of any disruption. Beyond that, there’s the post-Covid WFH divide of the laptop-class and the masked-up types who provide for them. There are still further divisions within and between those groups regarding other aspects of the CV19 response – jabbing, masking, house-arresting. Also, although not as extreme perhaps as on your side of the pond, there’s enough of the ‘culture war’ simmerings here to divert, distract and (ideally for the Establishment) destroy any nacent, non-Westminster organisations.
    6. Ukraine – that this has all been brought on by the dastardly Putin will be an all-too-easy get-out for those who got us here. There’s no debate at all here that ‘our’ reaction mgith not have been optimal – from the circular firing squad of the sanctions, to the arms transfers (always questioned as being too-little-too-late) all of it has been right and just and moral as we absolutely have to ‘stand with’ the Ukranians. I (like Scott Horton) wish to god that Putin, rather than invading, had turned the gas off and told the French & Germans to get the Ukranians to stop the shelling and adhere to their Minsk obligations, but we are where we are.
    And we haven’t even got to the Tories and theire soon-to-be new leader and a likely Trussymoon.

    We’re off to hell in a handbasket I’m afraid. Sorry.

    1. digi_owl

      “actions that could help right now (price-caps, nationalisation, organising workers)”

      I can’t help wonder if EU would nix many of those action outright.

      1. tindrum

        Does the EU have any say in UK politics any more?
        I agree with all of the above. Deeply pesemistic. There is no room to manoeuvre anymore. There may be a backlash this winter if dead people start to stack up in hospital car parks or fire stations because hospitals can not handle the load. Only the NHS appears to motivate the general population to get off their arses and do something.

        1. digi_owl

          Point is that i find it unlikely that if UK was still in EU, that Brussels would be happy with the nation implementing any of the suggested fixes. After all, free market, privatization and disorganizing labor are EU goals in practice if not in statement.

          That the gaggle of fools in Westminster can’t be bothered either is a different issue.

    2. JW

      As a Brit living in France, I concur with everything you say.
      I know its a bit frowned upon to say this here, but I would add that the lunacy of net zero is going to put a jet engine on that handbasket.
      If the French nuke’s rusty pipes don’t get a fast acting bandage, it going to be a very cold, dark and expensive winter over much of Northern Europe.
      I think the second top quintile is now being dragged into this.

      1. Questa Nota

        Not counting on the Royals to provide much leadership.

        Queen, fading.
        Charles, no respect.
        William is the Only Hope.
        Harry, oh please, opposite of leadership.

        If only Chuck and sCam would just go away for the good of the country and Commonwealth.

        1. Terry Flynn

          William the only hope

          Hmm I admit to finding it hilarious telling fellow Brits without Twitter what the trending terms were THAT morning (when it was obvious a super-injunction had been used to stamp out the story in the British media). This is a story of how a “sensible boring stable hand at the tiller” can be brought down by two hashtags. The injunction didn’t even work. One of our satire sites referred to the topic barely 48 hours later, causing them to re-trend as the rest of the country learnt what it was all about.

          Have the Royals never heard of the Barbara Streisand effect? Both elements to the story were known YEARS ago and had been reported elsewhere. Sheesh.

      2. Stephen

        I think you sum it up well.

        The political and much of the administrative and corporate elites are more in thrall to extreme globalist, wokist and climate related ideology than they are to practical policies to serve the country and the people living there.

        All of those ideologies contain some good aspects (eg social justice is a good thing, protecting the environment makes sense) but taken to extremes in an inflexible way have potential to be totalitarian and anti humanist.

        The problem is that the elites seem incapable of rolling anything back and this does not augur well. The self inflicted harm from the response to the Ukraine situation as a way of showing ideological purity is just one manifestation of this. Fealty to these causes ranks above common sense and humanism in many of their their minds. Taken to its logical conclusion, that is a recipe for deep human misery.

    3. alfia

      totally agree with Adrian D. In terms of UK political landscape – I can not see anyone on the horizon who is capable of delivering a decent government policy to even start getting UK out of the mess…. scary times

  4. Hastalavictoria

    The de-industrialisation began nearly 50 odd years ago under Thatcher and Reagan has run it’s course as outlined in the article

    Contrary to popular history who now would not not return to the 1970’s.?

    For whats’s not to like about the era that we enjoyed? . For today’s youngsters much of what we enjoyed then would sound like easy street today. Certainly a very good swop for a few day’s of T.U. caused inconvenience.

    For a 15 year old youngster he could leave school with the prospect of an apprenticeship and a job with a good company with a sound pension scheme ; Free education (hell I even got paid social benefit as a student in the holidays) and the NHS included even free dentistry.

    Well into the 80’s I could go to the Dr’s surgery any day at 9.00 in the morning and guarantee to be seen! No appointments 6 weeks hence required. Add full libraries and plenty of public toilets everywhere – surely the most basic of any public need. Local schools and technical colleges offering low cost evening courses for those who wanted to better themselves . The list is endless : better public housing, cheaper houses, more playing fields and all eliminated for the sake of shareholder value and the free market..Chuck in no food banks and virtually no homeless sleeping on the streets, and our town centre shops full with small business before being hollowed out with empty windows and charity shops and please,please don’t get me started on a comparison about the the state of the roads and our infrastructure.

    At well over 70 plus I cannot see any favourable outcomes for the old working class. Corbyn’s attempt to return to a 70’s style state was met and crushed by the establishment with it’s most liberal servants like the Guardian leading the charge. Corbyn was (is) often accused of wanting a return to the class war.Which by any yardstick is very rich and what successive Conservative governments since Thatcher onwards have been relentlessly waging.

    Unfortunately,the victors get to write history and when they talk about the 70’s Thatcher’s class warriors in the MSM refer only to to strikes which in truth really did not effect to many people especially those in rural areas.

    Our problem? the same people who gave you are the above are still running the show ! the World Trade Organisation,IMF World Bank etc were designed for the USA and the dollar to obtain economic supremacy and the switch to FIRE based economy (Finance, Insurance & Real Estate,) looking for rent extraction via the privatisation took full sway

    1. Terry Flynn

      Might I suggest reading Where did It All go Right?. Perfectly summarises growing up in late 1970s and 1980s UK…..before the worst effects of Neoliberalism really could be felt by us younguns.

      I’ve since learnt of hardships my parents concealed that were due to Thatcher but whilst we all have a tendency to glorify childhood, the official economic statistics and the more personal effects upon our family (in terms of giving Dad more than one chance to “make it” – even though other Neoliberal policies were starting to bite) – i.e. Before wages started to lag productivity massively – really illustrated a time where you could afford to endure one+ “hit by fate”. Certainly not true now.

      I used to endure huge resistance when I quoted real household wages and how during the 1970s/80s improvements began to be stolen. Interesting that fewer friends dispute that now.

  5. Mira Martin-Parker

    Quick somewhat related economic question. If I work one hour (one measurement of energy, plus one numeric idea of one), in exchange I receive payment in “things”/ideas only (i.e., zero dimensional units of one, i.e. physical nothing), perhaps a physical paper check-thing, but very unlikely. Usually people simply receive an electronic transfer of literal nothing. This seems on the surface a raw deal, a play, a slick move. Workers give two thing/”things” and receive one “thing” in return, a “thing” that is in actual fact, materially speaking literally nothing (a zero dimensional “object”).

    This “earning a living” game workers are playing appears to be precisely that, a game. In this game, workers give their energy (an empirically verifiable thing) plus their conscious awareness (a non-thing, idea platform), and in exchange they receive only ideas (non-things).

    Units of money after all, are only symbols not natural signs. There’s a logical difference between natural signs and symbols. A natural sign has something literally connecting the one thing to the other thing (smoke to fire). A symbol has no such physical connection (a stop sign and cars stopping). The cars don’t have to stop. They stop because they BELIEVE (here’s the mind) in something, and they believe in this something because they perceive it with their physical senses to be in their interest. Once they stop perceiving it with their physical senses to be in their interest, they stop stopping. They no longer believe.

    Am I missing something here? This giving of two things (units of physical everything and units of physical nothing, energy plus mind) and receiving of only one thing in return (units of physical nothing, ideas, mind only) doesn’t seem to make sense on the surface. Is there someone who can help me understand why continuing to play this game is a Good idea for workers? It used to be—we used to earn a living. There used to exist a natural connection between work and shelter, for instance. That is no longer true. One can work and be homeless. In San Francisco, most people cannot earn enough to afford shelter, and so they fall into debt traps.

    Many thanks in advance for anyone that answers my question….this has been troubling me for some time…

    1. eg

      The “things” workers are exchanging their time, energy and consciousness for are tax credits.

      As long as the tax man keeps coming (and he is backed by very real courts, police, prisons which in turn are backed by equally real weapons in the hands of armies, navies and air forces) those tax credits are the price of liberty. That’s a trade the vast majority have been willing to make — whether it will continue is anybody’s guess …

      1. Mira Martin-Parker

        I think Russia is currently teaching the world a metaphysical lesson in the difference between “things” (ideas, influential “objects,” knowledge is power) and things (physical force, power as energy, might makes right). Both have to do with measurement/number, but each aspect is expressed in very different (not equal) mathematical symbolic languages. It’s fine to do the postmodern thing and cavalierly dis metaphysics when you can understand and articulate what’s at issue (Nietzsche could do this). But most people can’t, they don’t have time to deal with it and must rely on/trust other people. We are an interdependent species, after all. Highly self-controlled desert monks are fine. But not everyone is or ought to be a highly self-controlled desert monk.

        Clearly there are some who grasp the logical difference between “things” and things and they are playing games with our collective lights (our collective power, and power relations are expressed in the highly abstract symbolic language of geometry).

        This whole issue is a little bit Plato’s Cave, a little bit Ralph Ellison’s Invisible Man, and lots and lots of Dostoevsky’s Underground Man and the Brother’s Karamazov, specifically the Grand Inquisitor chapter. The irony, of course, is that Underground Man and the Grand Inquisitor seem to have moved to the Bay Area, and are currently teaching at Stanford University…

        1. Lambert Strether

          > Clearly there are some who grasp the logical difference between “things” and things and they are playing games with our collective lights (our collective power, and power relations are expressed in the highly abstract symbolic language of geometry).

          Dubious. The distinction between “things” and things is not clear at all to our governing classes, who think they can manage the world through spreadsheet cells where weapons, labor, etc. are all fungible, when as brute fact they are not.

          Also, power relations are expressed through the exercise of power (“Let me see you smile”).

          1. Mira Martin-Parker

            P.S. “Let me see you smile” sounds like an ad baculum, and thus would be fallacious in a non-postmodern world where might doesn’t make right. O’Brien in 1984 spent a great deal of energy and time trying to teach poor Winston Smith this lesson in metaphysics. Remember how he kept chastising Winston for not grasping the difference between expressions of symbolic truth (2+2) and natural signs (“Let me see you smile” ). The two means of expressing truth are different and not equal, just as theory and practice are different and not equal…

            1. Mira Martin-Parker

              The symbolic language of geometry is the sanitized and respectable language elites (academics) use when communicating among themselves the language of mass murder (warfare, atomic energy, nuclear fission). We like to present the exercise of brute power as if it always is derived from a lower social caste (“Let me see you smile”), the masses are irrational, the masses can’t control themselves. But is it really the masses that can’t control themselves? Isn’t nuclear power nothing more than a grand ad baculum argument, only made possible by elite academics in the first place? After all, who communicated in the highly abstract language of points and lines, vectors and radians, the end result of hundreds of thousands of dead people? The academic class, the pretty ones communicated this ugliness. There are philosophers and sophists. The philosopher doesn’t want to rule and doesn’t take money for doing so, the sophist wants to rule and takes pleasure in doing so….

  6. juno mas

    Thanks to all the blokes for providing insight on the state of play on the UK pitch. A good morning read for me.

  7. paul

    And that, I suggest, changes the whole political landscape.

    Good one there,lovely suggestion.

    Questions: are actions are still legal and effective.

    especially if your outlook is bounded by establishment pattys and their instititutional concerns

  8. Tom Bradford

    Seeing the writing on the wall I abandoned a comfortable existence in the UK to emigrate in 1990, and have never regretted the decision. And even when making that decision I never thought things in the UK could get as bad as they are today – that so much I grew up believing was an accepted, universally acknowledged foundation for civilised life, a belief formed growing up the the Britain of the ’50s and ’60s, could be shrugged off like an out-of-date coat.

    The rot – for me the awareness – surfaced in the miner’s strike of 1984-85 and the ruthlessness of Thatcher’s destruction of the industry. Coal-mining was doomed anyway, but to me the remorselessness of the Tory’s utter inability to recognise a responsibility to help the miners and their communities adapt and adjust to it was well reflected in Thatcher’s ‘no such thing as society’ claim as, to me, she was saying there was no such thing as community, and proved it. You’re on your own.

    Watching from afar through the eyes of friends and family still there it seems to me the slide into social anarchy, into the law of the jungle, has been continuous and now with a global pandemic, the consequences of global warming becoming all too obvious, the economic consequences of Brexit and Britain becoming an industrial and political backwater, it has as Yves inelegantly observes ‘suddenly gotten steeped’. (Ouch!) The Tories are a small boat amid the survivors of the Titan struggling in the water, tossing lifelines to the few they think deserve it and who won’t rock the boat if rescued while abandoning the second and third-class passengers to their fate. Labour, bereft of all principles, is nowhere to be seen.

    Hopeless and a lack of vision is the order of the day. Survival has, as the article claims, replaced a vision of betterment. The conditions are ripe for a ‘popular leader’ preaching a vision to rise and gain popular support – just as Hitler did in 1933!

    Will it come to that? I hope not. But something substantial, far-reaching and for those reasons frightening, is needed and I’ve no idea what it is or where it might come from outside of a rabble-rousing leader. We saw it happen in France in 1790, and what came of that. It’s genuinely scary.

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