THE RISING PRICE OF DECEPTION

It's Sunday. But it's financial. So it's Friday Financial with JULIAN SAYER.

Why and how inflation and falling wages hasn't bothered the wealthy.

This week I want to look at inflation and the cost of living crisis. There was a lot of fanfare last week with the announcement that wage increases have finally passed the rate of inflation. The full details of the announcement can be found here;

http://www.bbc.co.uk/news/business-27047966

On the surface it sounds great, the bedrock of a recovery is in place and good times are just around the corner. But, if you look into what has happened over the last forty years and the consequences over the coming years, then a different picture emerges.

These figures include all the high ranking salaried jobs mainly in the banking and financial sector that we the tax payer so happily saved back in 2008. These salaries have and are rising faster than any other. These million pounds salaries and their huge bonuses will adversely affect this data, boosting the percentage higher and disproportionately. Our Government does little to cap them as it encourages the City to make more and more money. Just look at the figures involved, who else gets million pounds salaries and two hundred per cent bonuses?

http://www.bbc.co.uk/news/business-27154184

Wages for the average person have stagnated and inflation has eroded the spending power that this reduced income can buy. For example average earnings adjusted for inflation have dropped 7.2 per cent since 2010 – leaving millions more than £2,000 a year worse off. This is where the economy has been hurt.

BBC OFF THEIR TROLLEYS

The irony of Tesco profits being hit because workers don't earn enough.

ByHARRY BLACKWOOD

HAVING worked for the BBC for a short time, I can tell you categorically that most BBC journalists don't know their arse from their elbow.

Such is the narrow gene pool that the BBC selects its journos from (think Oxbridge and public school) that it's no surprise that they get the wrong end of the stick when it comes to even the most basic news judgement.

This week there was a classic example of what I'm talking about when Tesco announced its yearly results. The High Street behemoth posted profits of £3.3 billion. Worth pointing out at this juncture that a billion is a thousand million. So, a bunch of glorified corner shops pulled in 3,300 piles of dosh with a million quid in each. Nice work of you can get it.

http://www.bbc.co.uk/news/business-27046105

But the BBC wasn't interested in this massive amount of profit because some highly paid executive had already decided that 'the story' was a six per cent drop in profits. Except it wasn't. If you strip out new store openings, the like for like fall was only 1.4%. Not too shabby in times of austerity, inflation and queues outside food banks.

GUTLESS ED 'MR BEAN' MILIBAND MAY NOT EMBRACE LIVING WAGE

Sir George Bain, credited with devising the UK minimum wage has told the Financial Times that his system of protection for the low paid is outdated

By HARRY BLACKWOOD

WITH impeccable comedy timing, the Manchester United footballer, Wayne Rooney, signed a new contract today that will see him earn £300,000 a week. Yes you read that correctly £300,000 A WEEK for kicking a football.

Now I realise that's not funny. No, what's funny is that on the same day as an oafish footballer was putting pen to paper on a contract that will see him earn over a million quid every month, Sir George Bain - the man credited with coming up with the UK minimum wage - was telling the Financial Times that his system of protection for the poor had run its course.

You bet it's run it's course. It had run its course the day it was introduced because minimum wage was never going to lift people out of poverty. It was only ever going to keep them IN poverty. After 15 years that's EXACTLY what it's achieved.

The same poor bastards that were working all week on minimum wage In 1999 to earn enough just to scrape by are doing precisely that in 2014. Earning £6.31 an hour (the current legal minimum for adults) certainly isn't living. Hell's teeth, it's barely even surviving. That's what millions in the world's sixth richest country are doing - working their backsides off just to exist.

What Sir George failed to properly address in his FT article is how his minimum wage concept has actually failed miserably. What it's done is normalise low wages instead of acting as a benchmark to create a ripple effect and drive wages upwards.

There has been no ripple. There are 1.2 million UK workers who are paid £6.31 (or within 5p of that) and a further 1.4 million who are on within a measly 50p more. Employers think they are gushing philanthropists if they pay a few coppers above what they are legally obliged to.

In total there are five million workers in the UK who are 'low paid' by using the "official yardstick" of two thirds of the typical hourly wage. AND THERE IN A NEAT LITTLE PACKAGE IS THE PROBLEM.