Someone is misrepresenting the evidence – but it's not the IFS
Anyone who’s ever attended an IFS briefing knows that its economists have no god but data.
At their budget analysis events, the econo-droids endlessly refer back to their charts (or ‘beloved children’ as they’re known in the IFS) while journalists desperately try to wring out some political interpretation.
While the researchers are merciless in their mockery of economic illiteracy — whether red, blue, yellow or green — the organisation is independent to a fault.
Nevertheless, today’s Daily Mail accuses IFS director Paul Johnson of ‘Brexit doom-mongering’, over his alleged claim that living stadards today are ‘the worst since 1920’.
Unfortunately, he didn’t claim that. Rather (as the Mail article itself acknowledges) Johnson said that although ‘we are much better off than we were in the 40s, 50s, 60s, 70s and 80s’, the rate of change is now slower.
Wages in 2020 forecast to still be below 2008 levels. Historically unprecedented.
State pension and minimum wage up. JSA down. pic.twitter.com/0TDJont5oa
— Paul Johnson (@PJTheEconomist) November 24, 2016
And, though it seems harsh to point out a second glaring factual error in a 23-word headline, Johnson didn’t attribute the stagnation to Brexit either.
When directly asked why wages and living standards were stalling, Johnson pointed to the UK’s terrible levels of productivity, which have seen virtually no growth since the 2008 crisis.
Indeed, in his remarks he specifically pointed to the impact of non-Brexit factors: ‘the benefit and tax credit cuts announced last year, not to mention the increases in the personal allowance and the larger tax increases implemented since 2010.’
Of course, as an organisation concerned with facts, the IFS also recognises that the vote to leave the EU has made things worse — wiping out half of the wage growth projected back in March, such that wage levels in 2021 will still be below 2008.
‘One cannot stress enough how dreadful that is,’ Johnson said. ‘More than a decade without real earnings growth. We have certainly not seen a period remotely like it in the last 70 years.’
That is an unusually blunt statement from a usually detached economist, but it’s foolish to write it off as anti-Brexit doom-mongering.
Rather it’s an impartial reflection of just how bad things are.
Niamh Ní Mhaoileoin is editor of Left Foot Forward. Follow her on Twitter.
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