Why Britain's households got richer - and why they stopped

There are no signs of living standards for families getting any better. Brace yourself.

Before there is any prospect of shaking the economic pessimism that has engulfed the country we need first to alight upon a credible account of how working families will boost their living standards in the years ahead.

At the moment no-one is mapping out this course to a more prosperous future; but more surprising, perhaps, is the fact that we don't really know how it is that households got richer over the recent past. Even though recent history is unlikely to offer a clear guide to the future, it is instructive to understand why low-to-middle income households got richer over the last generation and more -- why it stopped.

Clearly, we do know what happened to headline economic growth over the last forty years, and that this resulted in an unparalleled rising tide of living standards, such that the average British household is twice as prosperous compared to 40 years ago. But we haven't, until now, been able to break down the sources of this rising tide of prosperity at the level of individual households, and tease out how they have changed over time -- for instance, between higher wages (for men and women), more people working, more hours worked, and more generous benefits and tax credits.

Now a landmark report by the IFS for the Resolution Foundation's Commission on Living Standards sets this out in forensic detail. It is a unique compendium of facts and figures about living standards -- and behind the statistics is the tale of economic and social change in late 20th and early 21st century: the rise of women, the relative decline of men and the emergence of tax-credits in low-to-middle income Britain. Any politician or pundit wishing to put the current squeeze on living standards into some meaningful context needs to put it on their Christmas reading-list.

A few findings leap out. Firstly, over the last forty years the great majority (over three quarters) of all the income growth arising from work in low to middle income households came from women. Indeed, women's contribution to total household income more than doubled from just 11 per cent in 1968 to 24 per cent in 2008. Much of this growth is accounted for by higher wages but a large share also comes from big increases in female employment.

Sources of household income growth 1968- 2008/09 - low to middle income households


Over the same period the model of the male breadwinner has taken something of a battering. The contribution of men's work to this same group of households plummeted from 71 per cent of total income to just 40 per cent. As shown in the chart above, this means that income from men's work accounts for only 8 per cent of all the growth in household income in this period, compared to 27 per cent for women. It is well known that male employment plummeted during the 1980s, but male wage growth has also been massively lower for this part of the population -- with any gains here nearly wiped out by falls in employment levels.

Secondly, if we look at the pre-crisis period of economic growth, from 2002 to 2008, a period characterised by steady growth, the evidence is even more striking. Women's employment served to raise household incomes, as did fast-rising tax credits (by an even larger amount); but these gains were almost completely wiped out by losses from male employment income. The net result? The chart below shows that average household income for this group barely rose at all: it went up by a grand total of £143 over 6 years.

Change in income for low to middle income households, 2002/03 - 2008/09, in 2008/09 £s


As with many reports, the conclusions you draw from it will to some degree reflect your starting point. Those favouring redistribution will, of course, point to the enormous importance of tax credits in helping lift family living standards, and be alarmed by the coalition's clear agenda of cutting them back. Whilst those instinctively opposed to using the tax-and-benefit system to mitigate market inequalities will take this report as proof-positive that some of the improvements in the Blair-Brown years were the product of unsustainable state spending.

But wherever you start from, several things jump out of this report as being particularly pressing to the current political debate. Most obviously we clearly have a gender problem -- in fact we have two. Given that income from female work is now so critical for families on low to middle incomes, and typical wages have been flat-lining over recent years, it is a uniquely dumb moment to reduce childcare support which has enabled so many women in low-to-middle income households to combine work and family life. Indeed, declining support for childcare, combined with falling public sector employment (which will affect women more), means that in the short-term female employment rates are likely to fall. Yet we also need to start talking about men. We all know that the UK suffered a strong decline in male employment in the 1980s, but what is less well appreciated is that male employment within the low to middle income group was still falling between 2002 and 2008. We rapidly need to halt this decline.

And -- perhaps this barely needs saying following yesterday's OECD report -- we are going to carry on having an inequality problem too -- indeed it will get worse. This is less a prediction, more a matter of arithmetic. Imagine for a moment that we find ourselves transported into an unlikely egalitarian future, in which pay increases (in per cent) at the top are exactly the same as those at the bottom (bear with me), well, even in this unlikely world, income inequality between households will rise. This is because households further down the income scale receive a significantly smaller portion of their budget from wages than the average household does -- never mind the most affluent. Consequently a given wage increase has a smaller impact on their overall income than it does for those further up the scale.

The only way this dynamic towards ever more polarised household incomes will be countered is either by more aggressively redistributive tax and benefit policies, or a disproportionately large rise in employment levels among this part of the population. And currently we're heading in the wrong direction on both these fronts. Brace yourself.

Gavin Kelly is chief executive of the Resolution Foundation 

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This Ada Lovelace Day, let’s celebrate women in tech while confronting its sexist culture

In an industry where men hold most of the jobs and write most of the code, celebrating women's contributions on one day a year isn't enough. 

Ada Lovelace wrote the world’s first computer program. In the 1840s Charles Babbage, now known as the “father of the computer”, designed (though never built) the “Analytical Engine”, a machine which could accurately and reproducibly calculate the answers to maths problems. While translating an article by an Italian mathematician about the machine, Lovelace included a written algorithm for which would allow the engine to calculate a sequence of Bernoulli numbers.

Around 170 years later, Whitney Wolfe, one of the founders of dating app Tinder, was allegedly forced to resign from the company. According to a lawsuit she later filed against the app and its parent company, she had her co-founder title removed because, the male founders argued, it would look “slutty”, and because “Facebook and Snapchat don’t have girl founders. It just makes it look like Tinder was some accident". (They settled out of court.)

Today, 13 October, is Ada Lovelace day – an international celebration of inspirational women in science, technology, engineering and mathematics (STEM). It’s lucky we have this day of remembrance, because, as Wolfe’s story demonstrates, we also spend a lot of time forgetting and sidelining women in tech. In the wash of pale male founders of the tech giants that rule the industry,we don't often think about the women that shaped its foundations: Judith Estrin, one of the designers of TCP/IP, for example, or Radia Perlman, inventor of the spanning-tree protocol. Both inventions sound complicated, and they are – they’re some of the vital building blocks that allow the internet to function. 

And yet David Streitfield, a Pulitzer-prize winning journalist, someow felt it accurate to write in 2012: “Men invented the internet. And not just any men. Men with pocket protectors. Men who idolised Mr Spock and cried when Steve Jobs died.”

Perhaps we forget about tech's founding women because the needle has swung so far into the other direction. A huge proportion – perhaps even 90 per cent - of the world’s code is written by men. At Google, women fill 17 per cent of technical roles. At Facebook, 15 per cent. Over 90 per cent of the code respositories on Github, an online service used throughout the industry, are owned by men. Yet it's also hard to believe that this erasure of women's role in tech is completely accidental. As Elissa Shevinsky writes in the introduction to a collection of essays on gender in tech, Lean Out: “This myth of the nerdy male founder has been perpetuated by men who found this story favourable."

Does it matter? It’s hard to believe that it doesn’t. Our society is increasingly defined and delineated by code and the things it builds. Small slip-ups, like the lack of a period tracker on the original Apple Watch, or fitness trackers too big for some women’s wrists, gesture to the fact that these technologies are built by male-dominated teams, for a male audience.

In Lean Out, one essay written by a Twitter-based “start-up dinosaur” (don’t ask) explains how dangerous it is to allow one small segment of society to built the future for the rest of us:

If you let someone else build tomorrow, tomorrow will belong to someone else. They will build a better tomorrow for everyone like them… For tomorrow to be for everyone, everyone needs to be the one [sic] that build it.

So where did all the women go? How did we get from a rash of female inventors to a situation where the major female presence at an Apple iPhone launch is a model’s face projected onto a screen and photoshopped into a smile by a male demonstrator? 

Photo: Apple.

The toxic culture of many tech workplaces could be a cause or an effect of the lack of women in the industry, but it certainly can’t make make it easy to stay. Behaviours range from the ignorant - Martha Lane-Fox, founder of, often asked “what happens if you get pregnant?” at investors' meetings - to the much more sinister. An essay in Lean Out by Katy Levinson details her experiences of sexual harassment while working in tech: 

I have had interviewers attempt to solicit sexual favors from me mid-interview and discuss in significant detail precisely what they would like to do. All of these things have happened either in Silicon Valley working in tech, in an educational institution to get me there, or in a technical internship.

Others featured in the book joined in with the low-level sexism and racism  of their male colleagues in order to "fit in" and deflect negative attention. Erica Joy writes that while working in IT at the University of Alaska as the only woman (and only black person) on her team, she laughed at colleagues' "terribly racist and sexist jokes" and "co-opted their negative attitudes”. 

The casual culture and allegedly meritocratic hierarchies of tech companies may actually be encouraging this discriminatory atmosphere. HR and the strict reporting procedures of large corporates at least give those suffering from discrimination a place to go. A casual office environment can discourage reporting or calling out prejudiced humour or remarks. Brook Shelley, a woman who transitioned while working in tech, notes: "No one wants to be the office mother". So instead, you join in and hope for the best. 

And, of course, there's no reason why people working in tech would have fewer issues with discrimination than those in other industries. A childhood spent as a "nerd" can also spawn its own brand of misogyny - Katherine Cross writes in Lean Out that “to many of these men [working in these fields] is all too easy to subconciously confound women who say ‘this is sexist’ with the young girls who said… ‘You’re gross and a creep and I’ll never date you'". During GamerGate, Anita Sarkeesian was often called a "prom queen" by trolls. 

When I spoke to Alexa Clay, entrepreneur and co-author of the Misfit Economy, she confirmed that there's a strange, low-lurking sexism in the start-up economy: “They have all very open and free, but underneath it there's still something really patriarchal.” Start-ups, after all, are a culture which celebrates risk-taking, something which women are societally discouraged from doing. As Clay says, 

“Men are allowed to fail in tech. You have these young guys who these old guys adopt and mentor. If his app doesn’t work, the mentor just shrugs it off. I would not be able ot get away with that, and I think women and minorities aren't allowed to take the same amount of risks, particularly in these communities. If you fail, no one's saying that's fine.

The conclusion of Lean Out, and of women in tech I have spoken to, isn’t that more women, over time, will enter these industries and seamlessly integrate – it’s that tech culture needs to change, or its lack of diversity will become even more severe. Shevinsky writes:

The reason why we don't have more women in tech is not because of a lack of STEM education. It's because too many high profile and influential individuals and subcultures within the tech industry have ignored or outright mistreated women applicants and employees. To be succinct—the problem isn't women, it's tech culture.

Software engineer Kate Heddleston has a wonderful and chilling metaphor about the way we treat women in STEM. Women are, she writes, the “canary in the coal mine”. If one dies, surely you should take that as a sign that the mine is uninhabitable – that there’s something toxic in the air. “Instead, the industry is looking at the canary, wondering why it can’t breathe, saying ‘Lean in, canary, lean in!’. When one canary dies they get a new one because getting more canaries is how you fix the lack of canaries, right? Except the problem is that there isn't enough oxygen in the coal mine, not that there are too few canaries.” We need more women in STEM, and, I’d argue, in tech in particular, but we need to make sure the air is breatheable first. 

Barbara Speed is a technology and digital culture writer at the New Statesman and a staff writer at CityMetric.