Unemployment falls sharply but the living standards crisis continues

Joblessness fell to 7.4%, the lowest figure since May 2009, but total pay rose by just 0.9%, a real-terms cut of 1.2%.

In the form of today's unemployment figures, Christmas has come early for David Cameron. Joblessness fell by 99,000 in the last quarter to 2.39 million (7.4%), the lowest level since May 2009, while employment rose by 250,000 to 30.09 million (although the rate, at 72.0%, remains below its pre-recession peak of 73.1%). The coalition now has an unarguably good story to tell on jobs, something we can expect Cameron to make much of at the final PMQs of the year today. 

But these headlines figures mask some worrying trends. Total pay, including bonuses, rose by just 0.9%, a real-terms cut with inflation at 2.2% over that period. In the public sector, pay fell in nominal terms by 0.3% (and will continue to fall in real-terms until at least 2015-16 due to George Osborne's pay cap). 

As well as enduring a living standards crisis, with the longest fall in wages since 1870, the UK is also suffering from a crisis of underemployment. There are now a record 1.47 million people working part-time because they can't find full-time jobs. 

The squeeze goes on

Source: ONS

The Tories remain confident that wages are a "lagging indicator" and that higher output will translate into higher salaries. As Osborne remarked after the publication of the most recent GDP figures, "If Britain is growing then the finances of Britain’s families will start to grow." 

For Labour, this optimistic analysis proves that the Conservatives have failed to grasp that the crisis is not merely cyclical but structural. The link between higher growth and higher wages has been severed and will not be easily repaired. Ed Miliband’s team point to the pre-crash period, when incomes for millions of low-and middle-income earners stagnated even in times of strong growth, as evidence that the market can no longer be relied upon to deliver for the majority. In an economy as unequal as Britain’s, any gains quickly flow to the top. If, as forecast, wage growth returns next year, it will be of the unbalanced kind seen in April, when high earners collected their deferred bonuses in order to benefit from the reduction in the top rate of tax (the one month since May 2010 in which real incomes rose).

If Labour is right, it is hard to see the Tories winning the credit they hope for the recovery. Confronted by Miliband's "cost of living" offensive, their instinct remains to shift the debate back to the macroeconomy. But they should be wary of relying on this line of attack. To most voters, after all, living standards are the economy. 

Unemployment fell by 99,000 to 2.39 million, the lowest level since May 2009. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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“Trembling, shaking / Oh, my heart is aching”: the EU out campaign song will give you chills

But not in a good way.

You know the story. Some old guys with vague dreams of empire want Britain to leave the European Union. They’ve been kicking up such a big fuss over the past few years that the government is letting the public decide.

And what is it that sways a largely politically indifferent electorate? Strikes hope in their hearts for a mildly less bureaucratic yet dangerously human rights-free future? An anthem, of course!

Originally by Carly You’re so Vain Simon, this is the song the Leave.EU campaign (Nigel Farage’s chosen group) has chosen. It is performed by the singer Antonia Suñer, for whom freedom from the technofederalists couldn’t come any suñer.

Here are the lyrics, of which your mole has done a close reading. But essentially it’s just nature imagery with fascist undertones and some heartburn.

"Let the river run

"Let all the dreamers

"Wake the nation.

"Come, the new Jerusalem."

Don’t use a river metaphor in anything political, unless you actively want to evoke Enoch Powell. Also, Jerusalem? That’s a bit... strong, isn’t it? Heavy connotations of being a little bit too Englandy.

"Silver cities rise,

"The morning lights,

"The streets that meet them,

"And sirens call them on

"With a song."

Sirens and streets. Doesn’t sound like a wholly un-authoritarian view of the UK’s EU-free future to me.

"It’s asking for the taking,

"Trembling, shaking,

"Oh, my heart is aching."

A reference to the elderly nature of many of the UK’s eurosceptics, perhaps?

"We’re coming to the edge,

"Running on the water,

"Coming through the fog,

"Your sons and daughters."

I feel like this is something to do with the hosepipe ban.

"We the great and small,

"Stand on a star,

"And blaze a trail of desire,

"Through the dark’ning dawn."

Everyone will have to speak this kind of English in the new Jerusalem, m'lady, oft with shorten’d words which will leave you feeling cringéd.

"It’s asking for the taking.

"Come run with me now,

"The sky is the colour of blue,

"You’ve never even seen,

"In the eyes of your lover."

I think this means: no one has ever loved anyone with the same colour eyes as the EU flag.

I'm a mole, innit.