Friday, 3 December 2010

Evidence of the 'squeezed middle'?

Labour leader Ed Miliband, and the rest of the Labour frontbench now seem to be triangulating towards a group they have dubbed the 'squeezed middle' although he seems a bit confused about who the 'squeezed middle' is.

The term has been coined by the Resolution Foundation (RF), which seems a fairly New Labour-ish kind of think-tank populated by the usual pretentious canape-devouring circuit that churns-out 'influential' waffle at an impressive rate.

Still at least RF knows what it means by the 'squeezed middle': "the 11 million households who (sic) earn between £12,000 and £30,000 a year". To most people that might look the vast majority of the working class, and really would be better described a low income households (full-time on the minimum wage is over £11,500), and indeed as well as using the political soundbite 'squeezed middle' they also use the more prosaic epithet "low-to-middle earners".

The language is important here: why from "low-to-middle earners" has Ed Miliband adopted "squeezed middle". Admittedly, "shat-upon-poor" is less acceptable to the Daily Mail, but it seems the concerns of the poor or low paid are so illegitimate as to be irrelevant to the new Labour leader (should that 'n' be capitalised?).

Miliband actually appears to be crow-barring higher earners into the "squeezed middle" too - stating those having child benefit removed are also the "squeezed middle".

Clearly Miliband is confused.

However, there is no reason for him to be: the low and middle income households are indeed being squeezed. Serious evidence of this was published this week by the Office for National Statistics in their Family Spending survey which showed for the first time (in the 10 years the data has been published in this way) UK household spending declined over the last year.

In 2009 the average household spent £455, down from £471 in 2008. With unemployment rising, short-term working, and pay freezes it is not surprising that households tightened their belts over this period.

The risk must be that with unemployment still high, and likely to rise further, there could be a continued downward slump. It is also clear evidence of the need for policies that are redistributive rather than regressive. With the Coalition cutting jobs, freezing pay and slashing benefits household expenditure will tighten further.

The squeeze exists, but not exclusively for the middle.

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