The evolution of average earnings gives an indication of the wellbeing of employees. This chapter examines the purchasing power of weekly earnings by comparing the price of a loaf of bread, a pound of butter and a pound of sirloin beef in selected years to nominal average weekly earnings of industrial workers in the industry sector in the same year.
A loaf of bread cost 5.5d (5 and 1/2 pence) in 1938 when the average industrial wage was £2 6s 4d (2 pounds, 6 shillings and 4 pence). Thus, a loaf of bread accounted for 1% of the average weekly industrial wage. In 1968, average weekly industrial earnings were £14 2s 5d and a loaf cost 1s 10.5d, 0.7% of the weekly wage. By 2000 average weekly industrial earnings were £364.80 and a loaf of bread cost 78 pence, accounting for 0.2% of the weekly wage. These figures, illustrated in Figure 6.1 below, show how the price of selected household items as a percentage of average weekly earnings have fallen significantly over the period.
In 1938 a pound of butter cost 1s 5.2d and a pound of sirloin beef cost 1s 0.7d, these prices equate to 3.1% and 2.3% of the average weekly industrial wage. By 1955 butter and sirloin were the same price, accounting for 3% of the average weekly wage. Since then the price of both products, as a proportion of the average industrial wage, has decreased significantly. In 2015 a pound of sirloin accounted for 1.1% of the average weekly wage. The relative price of butter fell at a greater rate and now accounts for 0.4% of the average industrial wage.
|Table 6.1 Price of household items as a percentage of average weekly earnings, 1938 - 2015|
|Year||Average weekly earnings||Price of bread||Price of bread as % of earnings||Price of butter||Price of butter as % of earnings||Price of sirloin beef||Price of sirloin beef as % of earnings|
|1938||£2 6s 4d||5.5d||1.0||1s 5.2d||3.1||1s 0.7d||2.3|
|1955||£6 3s 3d||9d||0.6||3s 9d||3.0||3s 8d||3.0|
|1968||£14 2s 5d||1s 10.5d||0.7||4s 11d||1.7||6s 9d||2.4|
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