The King's Speech - this one an anti-worker horror movie‏

Mervyn King Governor of the Bank of England (and VIP guest speaker at 2010 TUC Congress) last night forecast that that real wages in 2011 will be lower than 2005 levels – the worst period of wage stagnation for 80 years:

“Average real take-home pay normally rises as productivity increases – money wages normally rise faster than prices. But the opposite was true last year, so real wages fell sharply. And given the rise in VAT and other price rises this year, real wages are likely to fall again. As a result, in 2011 real wages are likely to be no higher than they were in 2005. One has to go back to the 1920s to find a time when real wages fell over a period of six years”

King’s speech can be read in full here: http://www.bankofengland.co.uk/publications/speeches/2011/speech471.pdf

Unlike mealy mouthed politicians King is to be admired in his candour: “monetary policy can affect the inflation rate at which these adjustments take place, but it cannot alter the fact that, one way or another, the squeeze in living standards is the inevitable price to pay for the financial crisis and subsequent rebalancing of the world and UK economies”

It’s not of course inevitable if workers through our unions fight back to reverse this downward spiral of wages. If we do nothing while the earnings of public service workers continue to fall behind the cost of living we can hardly complain about the growing inequality which scars British society.