Bringing the squeeze into focus

The ‘word of the year’ for 2011 is already featuring prominently in 2012. Yep, the ‘squeezed middle’ is the focus of the Resolution Foundation’s latest report, which they launched in central London earlier today. It’s a fascinating and nicely presented study, and I’d recommend you read it in full: this think tank really is very good at choosing the most revealing metrics to bring some clarity to an often vague debate. But, in the meantime, here are some of the things that stood out to me from today’s event:
 
1. The squeeze started long before the recession. Talk of the ‘squeezed middle’ often focuses on the impact of the recession and the resulting austerity, but the Resolution Foundation shows that the squeeze began long before. In fact, the ‘middle’ hasn’t seen any real pay rise since around 2003, despite the strong economic growth we saw until 2008:

2. Why has the middle been especially squeezed? One of the main squeezes on living standards is, of course, inflation.