Suppose everyone in Britain gets a 5% pay rise this year, what would that cost? Some maths here of the back-of-an envelope, City wine bar variety.
Total earned household income last year was £1700 billion. And 5% of that is £85 billion.
If you take out the self-employed, the figures are £1300 billion and £65 billion.
While such a pay rise would clearly be good news for households facing rising costs of, well, everything, it may not do that much for the economy as a whole.
Pay rises come from three places. 1) higher prices in shops. 2) company profits. Or 3) greater worker efficiency.
The first doesn’t make anyone any better off. The second is popular, but tends not to be sustainable. The third is the holy grail and is about as easy to locate as Jesus’s wine glass.
The terrible truth about pay and standard’s of living is that for millions of Britons they haven’t much improved for years.
Computer coders or lawyers or bankers might get genuinely richer, for many of the rest of us, this is a mirage.
Cars, washing machines and restaurants are plainly better than they were in, say, the 1990s, but otherwise not much has changed for far too many people.
Boris Johnson talks of a levelling up to a higher wage economy but may not be the man to lecture the rest of us on working efficiency.
And if we can’t have meaningful pay rises, well, how about a four-day week, which might be better anyway.
If Labour could get hold of this issue, plainly side itself with workers without alienating business it would surely walk the next election.
