Headlines of pay outstripping inflation for the third consecutive month (depending on which measure you use) dominated the news yesterday. These aren’t just meagre gains. Our tracker shows a real wage growth increase of 1.6% in the latest month for which data is available in December 2014.

This is a welcome change in narrative for the Conservatives, whose “fastest growing economy in the developed world” mantra had done nothing to enhance their polling position in the second half of last year. It will be personal, rather than macro-economic stories, which lead the Tory revival ahead of polling day, or so it is now hoped.

Those wearing blue rosettes come polling day can now fairly safely assume that headlines like these will continue in the run up to May, brought about by record-low inflation that may persist, albeit more a consequence of fortunate timing rather than any masterstroke of domestic policy. Indeed, ONS figures for average earnings are released two and a half months in retrospect, meaning that the latest data that we’ll have on wage growth on May 7th will be for the month that we’re currently in, February.

This lag in data publication means that should inflation pick up again in the Spring, perhaps on the back of strong sales in the retail sector or a rallying of oil prices, any end to the current boom of real wage growth will be concealed.

The crucial question is, therefore, can current gains develop at such a pace in the next two months for them to be felt in the general population to election-changing effect?

Wage Growth ChartThe reality is almost certainly no.

Average weekly earnings (AWE) were £449 in May 2010, the time of the last general election. By December 2014, this had risen to £489 – an 8.9% increase over four and a half years.

An extra £40 in peoples pockets each week sounds great on the face of it, but this is only relative to the rising bills that we as consumers inevitably face as each month passes; inflation. The Consumer Prices Index (CPI), the most commonly cited measure, recorded an 11.1% overall rise over this same period.

Our pay may have increased, then, but it goes less far than it did back in May 2010. It can be argued that the average middle class Briton of 2015 is more financially savvy, one who has gone some way to repay many of the personal finance debts racked up in the pre-crisis days. Solely in respect of earnings, however, we are in effect poorer.

This picture is made starker by comparing the same figures during the Blair/Brown electoral cycle of May 2005 to May 2010. Even though the economy suffered the deepest contraction since the Great Depression half way through this period, overall, pay was still significantly higher in relation to increasing consumer prices.

The chart here perhaps most powerfully articulates why it is that the Tories have yet to see the increase in voting intention that they feel they deserve. Like-for-like comparisons on the subject are tricking and so the figures here are only indicative, but the big picture holds true. Significant ground has yet to be recovered if people are to be at least as well off as they were at the last general election, with only four months to go until the political clock stops ticking.

But perceptions often prove more powerful than reality in politics.

Pay may not yet have fully recovered, but should economic stability continue, there’s every indication that wage growth will eventually return to pre-crisis levels. This is why you’ll hear the Tories repeat their “long-term economic plan” tagline ad infinitum, contrasting with their attack on the Opposition of “vote Labour, get chaos”.

This is not a big spend, big promises election. It is to be fought on what parties can pledge to an electorate made both more sceptical and savvy by years of economic stagnation and austerity. If the Conservatives can use the narrative explored here to convincingly argue for a return to pre-crisis earnings in the years ahead, perhaps middle Britain will ultimately take a look at their more powerful recent pay packets and, upon reflection, vote for more of the same.

An overview of inflation against total pay rises shown below. See Cicenomics for more.

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