'Millions Face No Increase In Living Standards'

Written By Unknown on Rabu, 31 Oktober 2012 | 23.15

Millions of families face a decade of stagnant living standards because of low pay rises and job cuts, according to a new report.

The Resolution Foundation said low and middle-income households may miss out on any economic recovery unless steps are taken to ensure growth is shared over the next 10 years.

It warned that even with a return to steady growth, a large proportion of households in the UK will be no better off in 2020 than they were in 2000.

The think-tank said the Government could help avoid this scenario by introducing more state subsidies for cheap childcare and cutting council tax on smaller homes.

Increasing the tax on expensive properties and cutting national insurance contributions for workers aged over 55 would help fund such measures, it said.

The report warns: "On the UK's current path, come 2020, household incomes across the bottom half of the working-age population look likely to be lower than they are today.

"A typical low income household in 2020 is set to have an income 15% lower than an equivalent household in 2008, a return to income levels not seen since 1993.

"Were the UK to boost skills in the bottom half of the workforce to an ambitious but plausible degree, raise female employment so that it matches leading international benchmarks, and repeat the scale of past successes in combating low pay, the combined effect on household incomes could be highly significant.

"In a scenario that combines success on each of these fronts, a typical middle income household looks set to have an income roughly £1,600 higher in 2020 than on the UK's current path."

The study calculated that about two million senior and professional positions and 400,000 basic service jobs are likely to be created over the decade.

But it said there would be a demise of about 800,000 administrative and manufacturing jobs in the UK that are predominately filled by low and middle-income workers.

The report was produced for the Resolution Foundation by the Commission on Living Standards, a group of leading employers, trade unionists, economists and heads of parents' groups.


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