As suggested by the Institute for Fiscal Studies, the average income per household had restored to the pre-recession level, and thus, hinted at the economic recovery since the great economic slump during 2007-08. The analysis of the IFS showed that the household incomes had finally been strengthening after initial slow recovery. The report revealed that that a family having two children had now been earning £31,000 after tax on an average, thus, improving upon the level during 2007-08.
The IFS report also hinted at falling of the gap between the richest and the poorest due to the squeezing of wages. George Osborne, the Chancellor, based on these figures has concluded that millions of people have now benefitted from the economic recovery. The Chancellor added that the confirmation about economic recovery from the IFS, an independent body, was indicative of the fact that incomes were back at their pre-crisis levels. It was a major milestone in their recovery efforts from the days of Labor’s Great Recession, and a sign of their long-term economic policy being on the sound footing, he added further.
George further added that they did not just want to restore the damage, but they wanted higher incomes for the hardworking families. There was need, as he said, to make provisions so that families earning more have to pay lower taxes as a mark of economic security. The IFS, on the other hand, termed the slow recovery as a remarkable feature of the slow-down. In 2007-08, just ahead of the recession, the earning of a family with two children had been £30,700, and the figure reached its maximum in 2010-11 prior to the feeling of the effects of the recession. The figure dipped significantly during the next two years, but increased to £31,000 in 2014.
The present improvement in the standards of living had been slow compared to previous economic recoveries. The income increased by 1.8% during 201-12 and 2014-15 while it grew by 9.2% after the recession of the early eighties, and by 5.1% during the nineties. Poor growth in wages has been termed as the key reason of slow economic recovery. However, increases in taxes, and other benefit cuts have also minimized incomes.