Ed Milband flailed around this morning while defining his “squeezed middle”. By the end of the Today interview, it basically counted as any household earning under £100,000 that is not reliant on benefits.
All wonderfully inclusive (see this chart). But including most of the nation in your analysis hardly helps in identifying policies to help these squeezed people.
Gavin Kelly at the Resolution Foundation has done a much better job. His broad definition is anyone who is “too poor to be able to benefit from the full range of opportunities provided by private markets, but too rich to qualify for substantial state support.” Even something this vague would have helped Miliband.
But Kelly does go further. His squeezed middle consists of:
…those on below-average incomes who remain largely independent of state support. While median income is relatively straightforward to establish as an upperthreshold, defining when people become independent of state supportis more difficult, particularly as all income groups are entitled to some welfarepayments.
This table shows the final definition, according to household type:
Kelly’s analysis shows what a genuinely important political problem the squeezed middle will be in the years ahead. He calculates that stagnating pay and the rising cost of living will leave these households losing an average of £720 in 2012. That is even before the impact of cuts to tax credits are taken into account. No politician can ignore that.
Miliband’s mistake wasn’t the choice of issue. It was the rubbish way he explained it.
UPDATE: If you want to read more on this, Gavin gives a compelling explanation of The Big Squeeze over at the Spectator Coffee House.
Jim Pickard
Kiran Stacey
