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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18 Responses to “Did the poor get richer under Thatcher?”

  1. David Timms

    It is also important to note that the factcheck graph shows the bottom 10% of the full time employed. As so many workers from this category became unemployed during the Thatcher years, more workers on slightly higher incomes would be counted in the bottom 10%, causing the average to rise.

  2. Benjamin Connell

    Surely weekly earnings need to be compared to inflation? If prices go up faster than earnings, you can still get poorer, even if your wage increases.

  3. Christoper Snowdon

    “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 every other leader too.”

    Not quite. Real wages declined during Harold Wilson’s second term.

  4. Nobody important

    The hysterical rhetoric and paucity of evidence deployed by right wingers like Guido Fawkes to try and prove what a great leader Margaret Thatcher was betrays a deep anxiety on their part and suggests an uncertainty in their beliefs.

    If one were to be quite sceptical and blunt, then it could be argued that Margaret Thatcher was nothing more than a useful idiot for uber-capitalists. It is feasible that she was placed as party leader and used to carry out the capitalists’ bank deregulation and anti-union agenda, then they threw her out of power when they had got what they wanted. Yes, she took great joy in enacting the policies of the rich and sought philosophical justifications for her behaviour, but she was ultimately the servant, not the master.

    One must ask oneself the question: was the Conservative progressive enough, was it ready to humour a woman leader in the 1970s? The answer is of course no. It is not progressive enough to have a female leader now, never mind over thirty years ago. She was selected for a reason.

    Thatcher was a place man, sent to do the dirty work. Just a hatchet man. And when it all went wrong the Conservatives could always turn around and blame “that bloody woman”. Which is exactly what they did.

    She was not a great leader, just a capitalist puppet, too vain and too unintelligent to realise that she was being used by the rich to increase and consolidate their wealth at the expense of the rest of society.

    So in that sense she is very similar to David Cameron. The difference between them is of course that Mr Cameron knows exactly who he is acting for, as he is a member of the class who is benefiting from the continuing consolidation of the wealth of the rich at the expense of the poor.

    Thatcherism has been tested to destruction but, despite a first class education, David and George want to carry out further tests.

  5. robertcp

    We need to remember that the Tories fiddled the jobless figures during the 1980s, including by switching the unemployed to disabled benefits. The real figure for unemployment was probably nearer to four million than three million. We also wasted North Sea oil during the 1980s and a lot of the people that got higher wages had negative equity by the early 1990s. I was saved from that fate by being unemployed for much of the late 1980s!

    I am not celebrating an old woman dying but her economic policies were a disaster.

  6. Aftab Iqbal

    My pay is less than father

  7. miss pixie

    I think it is also worth noting that wages have been decreasing in real terms since the 1980s, I think for the bottom 60% ish. I’d need to look it up. Not only has wealth become highly polarised, there is this decrease in real terms, which is hidden through certain goods becoming more available/cheaper, and this apparent increase in pay amounts.

  8. miss pixie

    I think it is also worth noting that wages have been decreasing in real terms since the 1980s, I think for the bottom 60% ish. I’d need to look it up. Not only has wealth become highly polarised, there is this decrease in real terms, which is hidden through certain goods becoming more available/cheaper, and this apparent increase in pay amounts.

  9. miss pixie

    I think it is also worth noting that wages have been decreasing in real terms since the 1980s, I think for the bottom 60% ish. I’d need to look it up. Not only has wealth become highly polarised, there is this decrease in real terms, which is hidden through certain goods becoming more available/cheaper, and this apparent increase in pay amounts.

  10. miss pixie

    I think it is also worth noting that wages have been decreasing in real terms since the 1980s, I think for the bottom 60% ish. I’d need to look it up. Not only has wealth become highly polarised, there is this decrease in real terms, which is hidden through certain goods becoming more available/cheaper, and this apparent increase in pay amounts.

  11. miss pixie

    I think it is also worth noting that wages have been decreasing in real terms since the 1980s, I think for the bottom 60% ish. I’d need to look it up. Not only has wealth become highly polarised, there is this decrease in real terms, which is hidden through certain goods becoming more available/cheaper, and this apparent increase in pay amounts.

  12. miss pixie

    I think it is also worth noting that wages have been decreasing in real terms since the 1980s, I think for the bottom 60% ish. I’d need to look it up. Not only has wealth become highly polarised, there is this decrease in real terms, which is hidden through certain goods becoming more available/cheaper, and this apparent increase in pay amounts.

  13. miss pixie

    I think it is also worth noting that wages have been decreasing in real terms since the 1980s, I think for the bottom 60% ish. I’d need to look it up. Not only has wealth become highly polarised, there is this decrease in real terms, which is hidden through certain goods becoming more available/cheaper, and this apparent increase in pay amounts.

  14. miss pixie

    I think it is also worth noting that wages have been decreasing in real terms since the 1980s, I think for the bottom 60% ish. I’d need to look it up. Not only has wealth become highly polarised, there is this decrease in real terms, which is hidden through certain goods becoming more available/cheaper, and this apparent increase in pay amounts.

  15. miss pixie

    I think it is also worth noting that wages have been decreasing in real terms since the 1980s, I think for the bottom 60% ish. I’d need to look it up. Not only has wealth become highly polarised, there is this decrease in real terms, which is hidden through certain goods becoming more available/cheaper, and this apparent increase in pay amounts.

  16. miss pixie

    I think it is also worth noting that wages have been decreasing in real terms since the 1980s, I think for the bottom 60% ish. I’d need to look it up. Not only has wealth become highly polarised, there is this decrease in real terms, which is hidden through certain goods becoming more available/cheaper, and this apparent increase in pay amounts.

  17. George Williams

    Figures mean nothing if they are so selective. It is the same trick the Lib Dems use to con some people into believing they are one the side of the poor. Which poor?

  18. northwing

    Yes, a bit like Osborne’s claim that relative poverty has declined under the Coalition: it has, but only because the majority are getting poorer thus narrowing the gap. The Tory’s cheerleaders, the wealthiest, however…. isn’t it about +13%/ annum at the moment?

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