Real Incomes = Real Hourly Wages TIMES HOURS WORKED
One more thing. The Channel 4 “Fact Check” blog misses a very basic but important point in analysing Labour’s “cost of living crisis” claims:
Real Income = Real Hourly Wages * HOURS WORKED
Labour are citing real hourly wage data and some survey evidence as an “attack” on Osborne’s “out of touch” (Labour’s claim) “controversial comment” (C4’s words) on real household income. In C4’s view it is “controversial” to correctly cite ONS data? Maybe it would be better if Osborne ignored the official statistics and went with his gut feelings? More seriously, survey evidence on household perceptions of inflation is known to be unreliable.
The truly remarkable data point in the 2012 statistics is the change in hours worked, which rose 2%. The changes to hours worked is the key data point in the “productivity puzzle” so people should be well aware of this. And falling real hourly wages plus rising hours worked is consistent with rising real incomes.
If anybody can find a European country which has similar real GDP numbers to the UK and hours worked & employment data which look like the graph below, I promise to do a post being extremely nice about Ed Balls:
Total hours worked and total in employment both hit record highs again in today’s data.
(By the way if anybody has a copy of the HoC Library research which Cathy Jamieson is citing, I’d love to see it, please mail me. I could not find Eurostat series which precisely matched the cited results.)