Did the poor get richer under Thatcher?

A post at Guido Fawkes' blog boasts that under Thatcher "wages went up across the whole spectrum, including for the poorest". As evidence, he produces this graph taken from Channel Four Factcheck.

A post at Guido Fawkes’ blog boasts that under Thatcher “wages went up across the whole spectrum, including for the poorest”.¬† As evidence, he produces this graph taken from Channel Four Factcheck.

As you can see, full time weekly earnings for the poorest (denoted by the Orange and turquoise lines) did rise slightly during Thatcher’s rule.

However as the graph shows, the average weekly earnings of all groups increased throughout the entire period from 1968 right up until 2007, when the current economic downturn began – as you would expect in a growing economy; as a society gets wealthier, children are typically richer than their parents, and each generation is typically wealthier than the previous one(the coalition may prove to be the exception to this rule of course).

Therefore claiming that “the poor got richer under Thatcher” is a bit like claiming the price of a stamp increased under Tony Blair – it did, but it also increased under almost every other leader too.

Put aside for one moment the fact that the earnings of all groups rose faster under Blair than they did under Thatcher (growth was 2.5 per cent under Blair compared to 2.3 under Thatcher), the percentage going to the bottom decile decreased relative to the median throughout the 1980s, as the graph below produced by the Guardian shows.

There is also the fact that your weekly earnings can’t go up if you don’t have a job – and there were 3.2 million people unemployed in 1984 – unemployment which obviously had a devastating impact on the living standards of the poor.

As the graph below from the Joseph Rowntree Foundation shows, the percentage of households living on the breadline during the 1980s increasing after falling throughout the 1970s, as did the percentage of households in the “core poor” – defined as people that are simultaneously income poor, necessities/deprivation poor and subjectively poor.

Breadline poverty

So did the poor get richer under Thatcher? Some (those in work) did, and some didn’t.

However working people have tended to get slightly richer whoever has been in power so long as the economy has been growing. What certainly did happen in the 1980s was that the proceeds of growth were distributed far more lavishly to the rich than to the poor.

And for those unfortunate enough to live in a family where the breadwinner lost due to deliberate government policy, the results were devastating. More than one in four UK children lived in relative poverty by 1997, compared to one in eight when Labour left office in 1979 (DWP, 2004). Poverty among pensioners stood at 21 per cent.

If this is the poor getting rich then General Augusto Pinochet was a democrat.

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