Bloomberg’s Lucy Meakin notes Bank of England governor Mark Carney’s speech warning of political tumult ahead, a consequence of a bad decade for wage increases.
The mid-19th century was a period of social and political upheaval in the U.K. economy that saw an international financial crisis and technological revolution. Sound familiar? Mark Carney thinks so.
The Bank of England governor described the economy as experiencing its “first lost decade since the 1860s” in a speech this week. Citing wage growth that’s at its slowest since that period, he said globalization for some has come to be associated with low pay, job insecurity and inequality.
“Substitute Northern Rock for Overend Gurney; Uber and machine learning for the Spinning Jenny and the steam engine; and Twitter for the telegraph; and you have the dynamics that echo those of 150 years ago,” he said.
Not even the Great Depression or two world wars produced a period of falling real wages like the present one, BOE data show.
[. . .]
Carney noted in his speech that the economic upheavals of the mid-19th century produced Karl Marx, who argued that the only way for workers to throw off the yoke of wage labor is revolution. Carney said the key is to redistribute the benefits of globalization and do more to ensure workers have the right skills to thrive.