‘Are you better off than four years ago?’ Ed Balls channels Reagan to highlight biggest fall in earnings since 1874

This parliament will see the largest drop in average earnings after inflation since 1874-1880

In a speech today, shadow chancellor Ed Balls will pose a question to voters that will bring to mind the words of former US President Ronald Reagan: “Are you better off than you were four years ago?”

Back in 1980, the US electorate decided it wasn’t, and consequently threw out the incumbent Jimmy Carter and ushered in eight years of Reaganism.

Ed Miliband will be hoping the question holds similar force when it comes from the mouth of the shadow chancellor later today, and Balls will seize on newly-released data on wages to make his case.

Indeed, new analysis commissioned by Labour has found that the 2010-2015 period will see the largest drop in average earnings after inflation in any parliament since 1874-1880. According to the findings, this will also be the first parliament since the 1920s when real earnings will be lower at the end than at the beginning.

Paradoxically, the figures come when for the first time in this parliament a majority of people believe the economy is heading in the right direction. According to YouGov, 52 per cent of people think the economy is improving or that there are signs of recovery.

Ultimately both Labour and the coalition have statistics on their side. The economy is growing strongly and this is reflected in public attitudes toward the country’s economic prospects.

On the other hand, most people aren’t yet seeing the benefits of growth reflected in their wage packets. Indeed, the presence of growth could even exacerbate this as a problem for the coalition – seeing the wealthy enjoy the benefits of growth again while most people struggle is likely to heighten the appeal of a message which stresses the importance of growth for all – i.e. a Labour message.

Labour is in fact on stronger ground than many people seem to assume. Talk about the ‘economy’ is something of an abstraction; what people really care about is how much money they have in their pocket at the end of the month, not how many percentage points the quarterly GDP figure comes in at. Certainly growth is important, but the public is wising up to the notion that growth should be the be all and end all of government policy.

This partly accounts for bafflement on the part of the commentariat as to Labour’s durable lead in the polls. The cost of living crisis never really happened for those middle class newspaper commentators who so enjoy putting the boot into Ed Miliband, and therefore it’s probably unwise to rely on them as barometers of public opinion when they start to tell us that the ‘cost of living crisis’ is over.

As Balls will make clear today, the collapse in living standards under the coalition is unprecedented in recent history. The real question is whether the public believes Labour would be able to do anything about it in government while still maintaining a tight grip on the public finances.

Put simply, things are lining up nicely for a very exciting General Election.

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