6 - A new look at the cost of living 1870-1914

Summary

Introduction

The dominant influence on the progress of living standards in late Victorian and Edwardian Britain was not the rise in nominal incomes but the long-run movement in the cost of living. During the last quarter of the nineteenth century the principal source of the sustained rise in the general standard of living of the working class was the strong downward trend in the cost of food, fuel and other necessities. And at the end of the century, when the steady improvement of the late Victorian period gave way to what Beveridge (1923, p. 463) called ‘the cramped, uneasy, envious, but not impoverished age of Edward’, it was the abrupt transition from falling to rising prices which precipitated the turnaround in real incomes.

For many years now the standard source for the quantification of these trends in wages and prices has been the careful work of Bowley (1904, 1920, 1937) and Wood (1909). According to Bowley, real wages improved by some 55 per cent from 1873 to the turn of the century, and four-fifths of this advance was accounted for by the bonus of lower retail prices, leaving only one-fifth attributable to higher money wages (Bowley 1904, p. 459, 1937, pp. 30 and 122). The significance of this partitioning is that it meant that a generous windfall was immediately available to all those in receipt of some source of income, and did not have to be won through acquisition of skill or struggles with employers.