Don’t Vote for the Tories: They’re Clueless on Wages
by Benjamin Studebaker
British Prime Minister Theresa May has announced plans for a snap election on 8 June. She’s way ahead in the polls, but her opponents demanded an election when she came to power, and cannot credibly oppose it now. The Conservatives may win–they may win by a lot. But they shouldn’t. So I’m starting a blog series called “Don’t Vote for the Tories.” Each post will give you a new reason to reject the Tories at the polls this June, grounded in research and data. I aim to do at least one of these each week until the vote. Today we’re talking about wages.
Under the Tories, Wages Have Stagnated
While there’s been some recovery since 2014, inflation-adjusted wages are lower now than they were when the Conservatives came to power:
In an economy that works for everyone, real wages should increase. But under the Conservatives, real wages are still lower now than they were in 2006:
This does not compare favourably with the Blair/Brown Labour governments. Here’s how Labour did in its last 7 years in power, compared with how the Conservatives did in their first 7, if we normalise the wages so that both start at the same value:
Labour lost the 2010 election on this record. Why should the British people vote for the Conservatives when their record on wages is so much worse than Labour’s?
What’s more, this wage stagnation is directly tied to Conservative economic policy. The Conservatives don’t invest in Britain–they’ve cut government spending by at least 11.5% relative to GDP since they entered government, and this data series only runs through 2015:
They’ve claimed these cuts would reduce the government debt, but by depriving the British economy of essential public investment they have damaged the tax base, allowing the debt to GDP ratio to increase:
One major consequence of this chronic underinvestment is that the British economy doesn’t have the funds to competitively develop its productive forces. Under the Tories, British productivity has fallen behind the other advanced economies, and continues to lag:
With stagnant productivity, it is incredibly difficult for real wages to grow without generating inflation. Britain needs to invest in technology, education, infrastructure, and healthcare to increase productivity and allow real wages to rise again. The private sector is not getting the job done.
The Conservatives’ response is to blame Labour for the global economic crisis and the shocks to productivity and wages that followed–as if Labour had any influence over whether the United States properly regulated its housing market. The Conservatives also like to accuse Labour of overspending in the 00s, but Labour spending during the years leading up to the crash was much lower than it was during the Thatcher years, relative to GDP:
Subsequent entries in this series: