Rise of City 'has cost workers £7,000 a year' says TUC
The City's relentless rise has sucked £7,000 a year from the pockets of the average British worker, a report from the TUC will reveal today.
The report Where Have All the Wages Gone? found that over the last 30 years the share of national income going to wages has fallen from 59 to 53 per cent. But over the same period the proportion of GDP going to profits has increased from 25 to 29 per cent, while the share of income spent on taxes and subsidies has been broadly consistent at around 11 per cent.
This means that the average Briton failed to share in the country's economic success before the financial crisis, losing out on £7,000 in lost earnings on average.
The report was produced using official statistics by Howard Reed, founder of Landman Economics, and Jacob Himmelweit, a fellow at the New Economics Foundation.
It blames the decline of industries that spend a high proportion of turnover on wages, such as manufacturing, and the expansion of new industries that have a far higher profit margin, such as financial services, for the figures.
Where Have All the Wages Gone? also concludes that the entirety of the rising profit share across the economy has gone to just one industry – financial services – which has increased its share of total UK profits from 1 per cent in 1980 to 15 per cent today.
The TUC argues that the success of financial services and the City has come at the expense of both workers and other industries, which failed to benefit from the economy doubling in size since the late 1970s.
It calls for more effort to diversify Britain's economy away from the City, particularly given the effect of the financial crisis, which forced the Government to inject up to £1 trillion into the banking sector to keep it afloat.
The report also looks at the wider economic consequences of the changes in the wage and profit share within GDP. Falling wages, it argues, have increased inequality and led to rising personal debt.
It says that since 1975 business investment, and since the mid-1980s spending on research and development, have been falling.
Diving in at the deep end is no excuse for shirking the style stakes
- 1 Why I'm on the brink of burning my Israeli passport
- 2 War is war: Why I stand with Israel
- 3 L'Oreal cuts ties with Belgium supporter Axelle Despiegelaere after hunting trip photographs
- 4 World Cup 2014: Robin van Persie appears to give his bronze medal to eccentric Netherlands fan moments after being handed it by Sepp Blatter
- 5 Iraq crisis: How Saudi Arabia helped Isis take over the north of the country
Ian Thorpe gay: Olympic swimmer comes out in Parkinson interview
Death in the Valley of the Dolls: Heroin overdose turns the spotlight on prostitution boom in California's tech industry
Supermoon 2014: When and why will the moon look bigger and brighter this summer?
Woman, 61, jailed for seven years after drink-drive death of cyclist
Gaza-Israel conflict: Pro-Palestinian demonstrators take to streets of London, Paris and New York in wave of protests
Sustained immigration has not harmed Britons' employment, say government advisers
War is war: Why I stand with Israel
7/7 memorial defaced on anniversary of 2005 attacks with ‘Blair lied thousands died’ graffiti
Australia facing international condemnation after turning around Sri Lankans at sea
Even when it brutalises one of its own teenage citizens, America is helpless against Israel
Socialist Worker called to apologise over ‘vile’ article saying Eton schoolboy Horatio Chapple's death is ‘reason to save the polar bears’
iJobs Money & Business
£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...
£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...
£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...
£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...