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The middle hasn't been squeezed as much as you think

The middle 20 per cent of working age households in 2011-12 had on average the same real-terms income as four years before.

Today we publish Riders on the Storm our new report on middle income households. But you know their story, right? The operative verb is to squeeze, or to be squeezed. Yet the data we've used - a panel survey conducted by researchers from the University of Essex for the past 20 years - shows something different.

The middle 20 per cent of working age households in 2011-12 (the latest survey data available) had on average the same income in real terms as four years ago. In other words, even in the teeth of the greatest recession in a century, their income wasn't squeezed, though it did stop increasing. It gets better, literally. Start at the other end in 2007-08 and two fifths of the middle income households moved up into the 40 per cent of the distribution that was above them. Around the same number stayed where they were in the middle 20 per cent. The rest moved down.

But how can this be? It's been proved definitively that real incomes are falling. The reason is that most work on these issues compares snapshots taken at different times except they are snapshots without the same people in them. We, too, found that the middle in 2011 had lower incomes than the middle in 2007. But those two snapshots of the middle don't contain the same people. As I said in the paragraph before, only around two fifths of the middle stayed in the middle over those four years.

To compare the two different snapshots is like looking at family photos and saying "Wow, auntie has really changed", except in the time between when the two photos were taken your uncle has divorced and remarried. This is why we chose to look at what happens if you keep the same people in the snapshot.

There are other problems with the typical approaches in this area too. Take this series of incomes: 3, 3, 5, 7, 20. Some of the work done by others focuses on the median income. The median in this series is 5. Imagine that we leave this series alone for four years and then come back to it. The person on 7 has retired, to be replaced by a much younger person earning 4. The new series is: 3, 3, 4, 5, 20. Suddenly the median has dropped from 5 to 4 even though no one got poorer. And, by the way, the median falls even if the person earning 5 before has popped up to 6, 7 or even 19.
Obviously it's still significant that the median is lower. But it's lower in my example because of a demographic change not because the middle was squeezed.

Right, enough of the thought experiment. Back to our findings. Track the same people and you find that their incomes haven't been squeezed. Yet they are stagnant. Despite being four years' older and despite, as our data also shows, slightly more of them being in work. So we're not getting carried away. The other reason not to put out the bunting is that the bottom 20 per cent, in particular, had a really bad time. Their level of employment had fallen. As many as a quarter were behind on their rent or mortgage.

Squeezed middle? Perhaps not. Smacked bottom? Yes, certainly.

Emran Mian is director of the Social Market Foundation

Emran Mian is director of the Social Market Foundation

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The New Statesman 2016 local and devolved elections liveblog

Results and analysis from elections across the United Kingdom. 

Welcome to the New Statesman's elections liveblog. Results will be coming in from the devolved legislatures in Scotland and Wales, local elections in England, and the mayoral contests in London, Salford, Bristol and Liverpool. Hit refresh for updates!

22:13: People are asking if there's an exit poll tonight. Afraid not (you can't really do an exit poll in elections without national swing). But there is a YouGov poll from Wales and I am conducting an exit poll of the four remaining members of staff in the NS building. 

22:11: It's true! Andy Burnham is considering running for Greater Manchester mayor. Right, that's it, I'm quitting the liveblog. Nothing I say tonight can top that. 

22:09: Rumours that professional Scouser Andy Burnham is considering a bid for Greater Manchester mayor according to Sky News. Not sure if this is a) a typo for Merseyside or b) a rumour or c) honestly I don't know. More as I find out. 

22:06: Conservatives are feeling good about Trafford, one of the few councils they run in the North West.

22:03: Polls have closed. Turnout looks to be low in London. What that means is anyone's guess to be honest. There isn't really a particular benefit to Labour if turnout is high although that is a well-worn myth. In the capital in particular, turnout isn't quite as simple a zero-sum game as all that. Labour are buoyant, but so are the Tories. In Scotland, well, the only questions are whether or not the SNP will win every single first past the post seat or just the overwhelming majority. Both Labour and Tory sources are downplaying their chances of prevailing in the battle for second place at Holyrood, so make of that what you will. And in Wales, Labour look certain to lose seats but remain in power in some kind of coalition deal. 

22:00: Good evening. I'm your host, Stephen Bush, and I'll be with you throughout the night as results come in from throughout the country. The TV screens are on, I've just eaten, and now it's time to get cracking. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.