UK incomes are decoupling from economic health

Has the typical family gained from the UK's growth since the 1970s?

On both sides of the atlantic, there has been a relatively long-running debate about the extent to which "decoupling" – the failure of typical household incomes to grow at a rate matching the increase in GDP – has occurred.

The classic treatment of the topic compares GDP per capita to the median family income, as Lane Kenworthy did for the USA:

The difference is clear, albeit not entirely unsurprising (what the graph shows is largely the result of the large increase in income inequality since the 1980s). Yet not everyone accepts that it demonstrates a real phenonmenon.

Kenworthy writes:

One objection is that the price deflator typically used to adjust GDP per capita for inflation differs from the deflator used for median family income. I’ve addressed that here by using the same deflator for both.

A second concern has to do with GDP per capita as an indicator of economic advance. Since the 1970s a larger portion of GDP has gone to replace old capital equipment and therefore can’t go to household income. Also, the number of persons has increased less rapidly than the number of households, so a per capita (per person) measure of GDP could mislead.

A third worry is that the income measure used to calculate median family income is too thin. If a growing portion of GDP has gone to employer benefits, that would help middle-class households, but it wouldn’t show up in these income data.

He addresses the second and third concerns by using a per-household measure, which includes in-kind payments and the effects of taxation. The result is a very similar graph:

This demonstrates, he says, that "decoupling is real and sizeable".

But what about the UK? Have we got the same problem? Yes:

All the data comes from the ONS, the inflation measure used is RPI, and both median and mean household income are taken measured from after the application of taxes and distribution of benefits.

Just as in the US, income growth for middle-class households has become decoupled from growth of the economy.

Stocks are up in the NYSE, but real incomes aren't. Credit: Getty

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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The attack on Les Bleus was an attack on the soul of France - that's why Euro 2016 must go ahead

As a continent reels politically from the refugee crisis and emotionally from the Paris attacks, football must find a new, confident voice.

After the Paris attacks, the great Bill Shankly’s words have rarely been so tested: “Some people believe football is a matter of life and death. I am very disappointed with that attitude. I can assure you, it is much, much more important than that.”

As bombers detonated their suicide belts outside the Stade de France, French and German football fans cheered what they thought were fireworks. They were unaware that it was the opening salvo in a night of barbarity. One of the bombers had a ticket for the game but, mercifully, was turned back at the turnstile. Had his bomb gone off inside the stadium, the immediate loss of life, plus the panicked stampede and two more suicide bombers lying in wait outside for escaping fans, could have produced a death toll higher than at Hillsborough, Bradford, Heysel or either of the Ibrox ­stadium disasters.

The French intelligence services have yet to conclude publicly whether the attacks were timed to coincide with the prestigious friendly or whether the crowd of 80,000 was simply another target of bloodthirsty convenience on an already preordained date. Either way, there’s no mistaking that an attack on Les Bleus was an attack on the soul of France. In the aftermath, the Germany-Netherlands friendly game was called off and Belgian football went into lockdown.

How should British football respond? To those who think that the sport is just 22 players kicking a ball around a field, this may seem a peculiar question. But ever since the tail end of the 19th century, when football escaped from its self-enforced ghettoisation in Britain’s public schools, it has had a greater purpose.

More than any other sport, football has been intertwined with politics. As Harold Wilson said: “It’s a way of life . . . a religion.” When President Rowhani of Iran wanted to bolster his image as a new kind of leader, he didn’t deliver a speech but tweeted a picture of himself wearing an Iranian football top, watching a match. Franco’s dictatorship clung to the all-conquering Real Madrid and punished FC Barcelona. On Robben Island, ANC prisoners idolised Billy Bremner of Leeds United and successfully demanded the right to play football.

In October, one of the biggest protests against the closure of the north-east’s steelworks was from 10,000 Middlesbrough fans at Old Trafford. When Catalans challenged hikes in transport costs, they boycotted public transport from the Camp Nou. The biggest “Refugees Welcome” signs in Europe weren’t produced by governments but by fans of the Bundesliga champions, ­Bayern Munich.

So while the singing of the Marseillaise at the England-France match at Wembley was a “hairs on the back of the neck” moment, most of us understand that it’s not enough. What is less well known is that this wasn’t the first time that one of the world’s few genuinely inspiring anthems has been performed in earnest in British football. A century ago, bands took to the pitch to play patriotic British, French and Russian music – not out of altruism but military necessity. The British army was under intense pressure at Ypres and urgently needed new volunteers. The War Office turned to football.

For many, the journey to Loos, Flanders and the Somme started with a routine visit to cheer on their local team. Their sport transported them from a home football field to their foreign killing fields. Many clubs, including Everton, held military training on their pitches, while Manchester City’s then stadium, Hyde Road, became a 300-horse stable. Hundreds of players died serving in the Football Battalion.

But for too long our national sport reflected Britain’s lack of ease with diversity. From the 1920s, the religious sectarianism that poisoned the west of Scotland was allowed to fester in Glasgow’s football. The sport’s tolerance of recreational racism became widespread. Outside stadiums, right-wing extremists sold their propaganda while, inside, black players were vilified – even by their own supporters. Football’s racism corroded its heart and was rationalised in its head: it was allowed on the pitch, cele­brated on the terraces and accepted in the boardroom and far too many changing rooms.

And now, as a continent reels politically from the refugee crisis and emotionally from the Paris attacks, football must find a new, confident voice. The sport and its fans cannot sit on the subs’ bench at a time like this.

In a nation where only one in five male workers joins a trade union, football is a rare regular collective experience. It is more authentic than click-and-connect social media communities. Despite high ticket prices, football offers the one place where thousands of working-class men, including many politically disenchanted young men, come together in a common cause.

British football has long since jettisoned its ambivalence regarding racism. But for organised extreme right-wingers, Islamophobia fills the space vacated by the anti-Irish “No Surrender” tendency on the sport’s fringes. Although the number of top-flight British Muslim players is infinitesimally small, the streets of Bradford, Blackburn and Birmingham teem with young British Muslims kicking a football. More clubs can harness their power to inspire and increase their ­involvement in community counter-­radicalisation strategies. Clubs should also take the lead by having zero tolerance for Islamophobia, training stewards and backing fans who stand up to fellow supporters.

And, finally, the European Championships, for which all the home nations bar Scotland have qualified, must go ahead in France next summer. There’s no liberté in cancelling. In the name of fraternité, let’s all back France as our second team. Allez les Bleus!

Jim Murphy is the former Labour MP for East Renfrewshire and leader of Scottish Labour 2014-15.

This article first appeared in the 26 November 2015 issue of the New Statesman, Terror vs the State