Today's figures show that the squeeze on households' real incomes is continuing. Wages rose by only 1.1% in the year to the three months ending January, whilst yesterday's numbers showed that prices have risen faster. This poses the question: does this squeeze on real wages mean that capitalists are winning the class struggle? The answer is: yes and no.

One useful measure here is the own product real wage - wages divided by the product of productivity and prices. This captures the two different ways in which capitalists can increase their exploitation of workers. One way is to reduce wages relative to prices. The other is to make workers work harder for a given real wage - to raise productivity.

My chart shows the OPRW, based upon average earnings divided by the product of the CPI and GDP per hour*. You can see that since the end of 2008, the OPRW has fallen - largely because prices rose by 10.8% whist wages rose only 4.2%.

However, its possible that the OPRW rose in Q1; I say so because the 1.4% rise in hours worked in the latest data imply that productivity fell.

What's more striking, though, is that the post-2008 drop in the OPRW merely reverses the rise that occurred in the mid-00s.

In the mathematical sense, there's a simple reason for this; in the five years to December 2008, real wages rose 10% whilst productivity grew by just over 2%.

Now, although I have written this in crude Marxist terms, the implication is not so crudely Marxist. What this means is that, viewed in a longer-term context, the problem of the 'squeezed middle' is not so much that workers are being ripped off by high price rises. Instead, the problem is that productivity growth has stagnated for some time, and lower productivity growth must mean lower growth in real incomes for someone. In the mid-00s, workers escaped this - perhaps thanks to the temporarily relatively tight labour market then. But now, they are paying the bill. Given that mass unemployment has tipped the balance of class power in favour of capitalists, they might continue to do so.