The last six years have marked the slowest economic recovery in British history, and though it is debatable just how widespread this recovery is – most experts agree it is very much a shared London and South East experience – there is little doubt that the recovery is beginning.
Gross Domestic Product (GDP) is 0.17 smaller than back in 2008, UK households are still worse off than before the crisis began. As one economist glibly puts it: ‘It has been six years and the cake hasn’t grown but the population has.’
Analysis by the National Institute of Economic and Social Research (NIESR) and the Office for National Statistics (ONS), however, confirms what many of us have thought all along. We have always been a nation of winners and losers.
The losers in the Great Recession 2008-14 are the usual suspects – students, young unemployed, benefit recipients, public sector workers, and savers who have all been marooned by tax rises, spending cuts and low interest rates introduced by the Coalition Government to revive the economy.
It is not entirely the case that the rich have continued to get all the pleasure and the poor all the pain, but as truisms go this one fits the last six years rather neatly. The only caveat is that high earners on over £150,000 a year could claim that tax rises have rather limited their capacity for expensive holidays abroad.
Among the winners, estate agents have done rather well, with an 18.6 per cent rise in numbers since 2008; while law and accounting workforces have increased by 13.3 per cent. The pharmaceuticals sector has done rather well too, because we are probably all taking more pills to ease the stress of coping. The pay in these three industrial sectors has risen above the norm – by 7, 9 and 9 per cent respectively.
Inflation has taken away some of the benefits, but at least these industries have not seen their pay frozen throughout, nor benefits cut and removed completely – unlike others.
Among industries manufacturing – especially vehicle manufacture – has been hardest hit, along with civil engineering and building and construction.
Overall the ONS report that UK household incomes are currently 6 per cent below the high of 2009, and they are not expected to recover much before 2018. One of the industries most affected by the recession has been financial services, where numbers have shrunk by 21.9 per cent. However, during the same period financial services incomes rose by 22 per cent in compensation, meaning, yes, you’ve got it, bankers did rather well. The sensible ones have moved into the Payday loan businesses too.
Other beneficiaries include households with large debts. Savers lost out, but though pensions have been inflation-proof during the period, small-saving pensioners have lost out through very low interest rates.
The ONS reports that the decision to hold rates at a record low of 0.5 per cent for over five years has handed a £19,000 windfall to borrowers with £100,000 of debt, while those with cash savings of £100,000 have seen their incomes fall by £18,500. Truly a nation of winners and losers.
How was the Great Recession for you?
This blog post is part of Society Matters. The blog seeks to inform, stimulate and challenge our understanding of this changing world and of our humbling role within it.
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