Have we endured cost-of-living crises in the past?
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In the aftermath of the Second World War, the United Kingdom faced a difficult economic situation. Despite this, there was no cost-of-living crisis in the country at the time, even though money was tight and rationing was in place. Back then, within the vast majority of families, women stayed at home to keep the house clean and to look after their children, which meant just one income coming into the household.
This is in stark contrast to the economic situation we’re living through today. Given that, in many homes, both parents earn a wage, and also given that families are much smaller in size than those in the fifties and sixties, you’d assume that people would be much better off than those living through the post-war decades. Yet this doesn’t seem to be the case.
The primary reason why this period of time doesn’t compare to today is due to the government's intervention in the economy after the Second World War. It implemented a number of measures to control prices and inflation. For example, there were price controls on essential goods, such as food and fuel, and increased taxes on luxury items. This helped to keep the prices of such things stable and prevented inflation from spiralling out of control.
In addition, the government of the time incorporated rationing. This was intended to ensure that essential goods were distributed fairly and that everyone had access to them. Rationing was in place until 1954, when it was gradually phased out as the economy recovered. Despite these restrictions, people could still generally get their hands on the goods they needed.
Another factor that contributed to the absence of a cost-of-living crisis in the fifties and sixties was the sense of community spirit that existed in the country at the time. People were willing to work together and make sacrifices for their family, friends and neighbours. You still saw plenty of poor people, but there was little prejudice around this, as everyone was in the same boat. Instead, there was a sense of solidarity and a shared purpose that helped to alleviate the difficulties of the post-war period.
Today, the economic situation is very different. Inflation is on the rise, and the cost-of-living crisis is causing a lot of heartache for many families, at a rapid rate. There are several reasons for this. Firstly, globalisation has made it easier for companies to outsource production to countries where labour is cheaper. This has led to a decline in manufacturing jobs in the UK, which has had a negative impact on the economy overall.
Secondly, technological advancements have made it easier for companies to automate processes and reduce their workforce. This has led to a decline in jobs within certain sectors, such as manufacturing and retail. As a result, many people are struggling to find employment or they’re limited to working low-paid jobs.
Thirdly, our current government's austerity policies have had a significant impact on people's living standards. These policies have led to cuts in public services and benefits, which has had a particularly harsh impact on the most vulnerable members of society.
The rising cost of housing has also placed a significant strain on people's finances. Housing is now unaffordable for many people, particularly in London and the South East, where prices have skyrocketed in recent years. This has led to a situation where people are spending a significant proportion of their income on housing, leaving them with little disposable income or money for other essentials.
Our sense of what constitutes ‘basic needs’ has changed over the decades, too. For instance, when couples got married in the fifties and sixties, many lived with their parents/in-laws whilst they saved up for a house of their own. Then, when they did move into their own homes, they did so with just the clothes on their back in most cases; they had to further save up money for white goods and other relative luxuries that we take for granted today.
When a couple move in together in modern times, they see a washing machine, broadband, a television, an electric shower, central heating, an oven and fridge as essential items. Non-negotiables. Even if it means getting into debt to provide them. Most couples will also be paying for a smartphone each and at least one car, so that the household can get from A to B.
When you compare this to our parents’/grandparents’ experience, you can see why our lives will feel more costly today—and that’s before you incorporate all the current problems mentioned above.