Gordon Brown first started talking about the “squeezed middle” in 2009.

His successor as Labour leader, Ed Miliband, has used the phrase countless times since then, and Labour has made tackling the so-called “cost of living crisis” a central plank of its election strategy.

Labour says the average household is £1,600 a year worse off since the election.

But new research out today by the Social Market Foundation (SMF) suggests that claims of an income squeeze for Britain’s middle-income households have been exaggerated.

What does Labour say?

Labour’s “cost of living bombshell” campaign is based on figures from the House of Commons library, which track how inflation has risen faster than wages since the 2010 general election.

The result is a fall in real wages of around £1,600 a year, based on comparing ONS figures for average weekly earnings in May 2010 to the latest number, and using RPI estimates to adjust inflation.

This is a slightly old claim and we think it needs updating slightly. The shortfall only comes to about £1,460 a year using the latest figures from January 2014, we think.

And you can query several aspects of Labour’s analysis. For a start, they use the RPI rather than CPI measure of inflation, which tends to offer a higher estimate of rises in the cost of living, and so makes the shortfall appear bigger.

Labour’s official explanation for this is that RPI includes housing costs so gives a more accurate measure of income squeeze, but it has to be said that the measure is now no longer a designated national statistic and a question mark must remain over its use.

Labour has also chosen to dwell on “regular pay” rather than “total pay”, which excludes bonuses. Again, this decision makes the cost of living gap appear bigger.

Nevertheless, no-one is questioning the basic point that the average median real wage has fallen in recent years because inflation has gone up quicker than earnings.

The Institute for Fiscal Studies said Labour’s calculation “does not give a misleading picture of the magnitude of falls in living standards” seen since the election.

What’s new today?

The Social Market Foundation has done something quite different to Labour’s analysis, which compares two snapshots of average earnings, one taken in 2010 and one more recently.

But the snapshots have different people in them. A household’s earnings can change dramatically over four years. Very low earners can get rich, for any number of reasons, and high earners can experience a slump in their incomes.

The foundation has taken longitudinal data from the British Household Panel and Understanding Society surveys, to look at who was earning what in 2007/08 and how their fortunes had changed 2011/12

On the face of it, this is a more fluid analysis which tracks the changing fortunes of real people in the middle 20 per cent of the income spectrum.

Households in this middle band, the third quintile of five, currently have an income of £26,100 and £41,200 before tax and benefits, with an average of £33,600.

There was a striking amount of economic mobility between 2007/08 and 2011/12. Nearly a third of people then in the third quintile (31 per cent) had made it into the fourth quintile four years later, and one in 10 had risen all the way into the top fifth of earners.

Some fell in the rankings too, but the climbers outnumbered the fallers. Overall, this meant that the average household in the middle 20 per cent in 2007/08 had experienced “no significant change” in income by 2011/12.

Does this mean Labour is wrong about the squeezed middle?

The new research does not shoot down Labour’s point that average incomes have fallen for most of the time the coalition has been in power, according to the kind of snapshot analysis discussed earlier.

The SMF does its own analysis of this kind and says that the average monthly income for the middle band of earners fell from £2,961 to £2,817 between 2007/08 and 2011/12. That’s just over £1,728, similar in scale to Labour’s figures, although the period of time is different.

But the thrust of this report is that we can get a better angle on real people’s experiences if we follow actual middle earners over time and see how they coped with the recession.

It suggests that middle-income families have changed their behaviour quite sensibly to cope with factors that could squeeze income.

Rather than getting into debt or raiding savings, middle earners are reining in their spending on things like food, and using grandparents to help mitigate the rising cost of childcare.

More than half of these households own a house with a mortgage, and 15 per cent own their own home outright. Low interest rates mean they have been protected from rising housing costs.

The report also links the continuing prosperity of the middle earners with the availability of work. Employment – and in particular having two earners – was the main factor in helping households climb the income scale.

The verdict

In political terms, this research doesn’t exactly blow Labour’s “bombshell” concept out of the water. Real wages have fallen, according to the SMF’s own snapshot analysis.

But this does throw a different light on the supposedly “squeezed” middle, showing us that many middle-earning households have kept their heads above water and some have thrived in times of recession.

If you accept that government policy is responsible for two key economic trends – continuing low interest rates and relatively high levels of employment compared to previous recessions – you have to conclude that this analysis is broadly supportive of the coalition.

It’s not great news for Ed Miliband, who signalled again today that he intends to keep pushing on falling real wages, citing pessimistic Office for Budget Responsibility forecasts.

The SMF also contrasts the fortunes of the middle-earning fifth with those of the bottom 20 per cent over the same period, saying the lowest earners spend far more of their income on the basics (food, energy and housing) while facing falling employment levels.

All of this leads the think-tank to suggest that we should stop worrying so much about the fate of the squeezed middle and turn our attention to the “smacked bottom” at the lower end of the earnings scale instead.