The bargaining power of the average British worker should be back to where it was when Tammy Wynette topped the charts with Stand By Your Man and the Rolling Stones announced an upcoming American tour with a performance from the back of a truck on Fifth Avenue.

May 1975 was the last time the unemployment rate stood at 4.2%. Back then official statistics showed that wages and salaries were increasing at 29.4%.

A salary increase of almost 30% was quite a show of strength from a workforce that had witnessed the political situation deteriorate to a point where the government needed an informal coalition partner to stay in power and a referendum on European Union membership was only a month away.

There are many on the left who would like to go back to the days when trade union membership was at its height, leaders of the biggest unions had the ear of prime minister Harold Wilson and pay was rocketing. Except that the appearance of power belied desperate times. Shock oil price rises had sent inflation soaring to 26%. Within months it would hit 27.2%. As a result, real wage increases – those that take inflation into account – were miserably low for many.

So much for the era of union power. By 1975 it was already waning. It’s true, the situation might have been worse without unions, but a general sense of impotence was felt by the wider workforce.

These days there is a view that trade unions are not necessary for wages to rise at an accelerated pace. Andrew Haldane, the chief economist at the Bank of England, is one of those who put little store by union power and more on the dynamics of the labour market.

He has talked about the squeeze on employers that flows from a shortage of workers now that unemployment has dropped to 4.2%. This squeeze will make employers desperate to retain staff and higher wages will be part of the enhanced terms of employment. Employers will need to attract the services of new staff on pay levels far in excess of last year’s advertised rates.

There are surveys that support his view. For instance, the latest feedback via the IHS Markit survey of household finances shows that people have not felt so secure in their jobs since this particular survey began in 2008.

A sense of security is one of the building blocks of bargaining power. When workers believe they are unlikely to be made redundant and they look around to see huge numbers of advertised vacancies, a hefty wage rise should be in the bag.

Bank of England forecasts also use the period before the financial crisis as a guide. This was a time when unions were weak and yet wages accelerated by 3% to 4% a year. Even during the years after the great immigration surge from eastern Europe, which dates from 2003, the figures show wages growing at a healthy lick until recession in 2009.

Haldane voted for a rise in interest rates last week along with two other members of the central bank’s monetary policy committee, largely, it seems, to calm down runaway wage rises, or at least the imminent threat of an inflation-inducing pay bonanza.

Surveys are one thing, hard data is another. And David Blanchflower, the labour market expert and academic, says the data points in the opposite direction. His reasoning can be found in his latest assessment of global employment trends, co-written with Stirling business school professor David Bell.

Between 2008 and 2016 real wage growth across the 34 members of the OECD only exceeded 1% a year on average in France, Germany, Iceland, Norway and Sweden.

Wages in the UK rose last year by around 2.5%, but remain well short of the 3% to 4% the Bank says would trigger inflationary pressures.

That’s because the Bank is blinded to the effect of under-employment, says Blanchflower, just as the US Federal Reserve fails to consider the impact on the labour market of a low participation rate and the huge number of workers who neither have a job nor claim benefits. In both cases, there is in effect an army of under-employed people who are ready to take work and thereby limit the potential for wage rises.

Under-employment can be seen in the figures showing the amount of extra hours people want to work, and especially part-time workers who want full-time employment.

Why? According to Nobel economics laureate Ned Phelps, the 2008 financial crisis is to blame. It shook workers to their core and robbed them of any confidence.

Blanchflower, a former MPC member and professor at Dartmouth College in the US, says in-depth breakdowns of official data show the demand for extra hours is growing and keeping pay in check. It means the age of anxiety trumps the unemployment rate. It means the central bank’s chief economist is wrong.