LOW and middle income earners in the UK are in the midst of a long stagnation in living standards, according to a key report published this morning.
The independent Commission on Living Standards – set up by the Resolution Foundation – says that “large swathes” of households will be no better off in 2020 than they were in 2000.
Technological developments and globalisation are prompting “a hollowing out of middle-income jobs”, the report says. “Two million senior and professional jobs are expected to be created along with 400,000 basic service and elementary jobs. Meanwhile 800,000 mid-level admin and manufacturing jobs look set to be lost,” it adds.
The report proposes that taxes be cut for low earners. “Under current government plans, a low paid second earner will face an effective tax rate of 65 per cent from the first pound they earn,” it says, suggesting that Universal Credit be unaffected during the first £2,000 earned.