According to new research from the Resolution Foundation, the lower and middle classes are having the most difficult time recovering from the recession. The report evaluated more than 10 million adults and their children. Those covered in the survey didn’t receive a significant amount of financial assistance from the government.
The report found that citizens in this demographic group would not experience a recovery in their wages until 2020. However, wealthy citizens incomes will continue to increase significantly over that time frame.
Last February, the Resolution Foundation issued a similar report on the cost of living increase. Labour leader Ed Miliband warned that an increase in the cost of living continues to place excessive burdens on the middle class, even though the overall economy improves. Miliband states that the Labour Department has failed to address the needs of the middle class in the past.
Spokesman and former Treasury Secretary Byrne will raise the report and the implications of its findings with his successor to Chief Secretary of Treasury, David Laws. Byrne and other members from the Foundation intend to find solutions. The two former and current Treasury Secretaries haven’t spoken since Byrne left his position to take over as the Shadow Secretary of State for Work and Pensions in 2010. Byrne’s last communication to Laws came in the form of a letter that read: “Dear Chief Secretary, I’m afraid to tell you there’s no money left.”
Since Byrne resigned as the head of the Treasury, the economic conditions have decreased significantly. This is another trend that paints a bleak picture for the middle and lower classes. If the UK faces another recession, wage growth may decline even more in the coming years.
In an interview with reporters, Byrne warned that the UK faces the possibility of a lost decade. This was the fate that the United States experienced due to the onset of the Great Recession. New measures will need to be implemented to prevent such an outcome from arising.
Byrne warned that the government’s reform methods fail to create new jobs. Also, changes in welfare packages are only benefiting citizens who are not currently working. New packages are going to need to be implemented if the government intends to improve the conditions of the working class.
According to the study’s author, the middle class did not get to enjoy the financial benefits from the booming economy before the recession. He implied that the wealthy continue to benefit at the expense of the working class even as the economy transitions from recession to stagnation.