The TUC has found that the average worker has lost £11,800 in real earnings since 2008 and that the UK has experienced a worse real wage slump than many other leading economies.
The analysis stated that people in the London Borough of Redbridge had lost the most. They are still earning 34 per cent less in real terms than a decade ago – the equivalent of £181 a week. Both poorer and more affluent areas have been affected by sharp falls in wages and in 307 local authority areas (about 75 per cent) real wages are still lower than a decade ago. There are also wide variations in losses, the analysis revealed: in London average workers have lost £20,000 and in the South West £14,400.
These figures were arrived at by adding up the yearly figures for wage decline since 2008. For many years prior to 2008 the UK had real wage growth (taking into account inflation) of about 2 per cent. After 2008 wage growth went into reverse until recently. We had ten years of stagnant wages – 1.1per cent rise in real wages taking into account inflation.
Average pay packets are not set to recover to their 2008 level until 2024, the analysis claimed, adding that the UK is one of only two advanced economies (along with Italy) where real wages were still lower than a decade ago.
TUC general secretary, Frances O’Grady, said,
The government has failed to tackle Britain’s cost of living crisis. As a result millions of families will be worse off this Christmas than a decade ago. While pay packets have recovered in most leading economies, wage growth in the UK is stuck in the slow lane. Ministers need to wake up and get wages rising faster. This means cranking up the pressure on businesses to pay staff more, especially at a time when many companies are sitting on large profits. And it means giving unions the right to bargain in more workplaces.
Stephen Clarke, senior economic analyst at the Resolution Foundation think-tank, told the Guardian,
While wages are currently growing at their fastest rate in a decade and employment is at a record high, the sobering big picture is that inflation-adjusted pay is still almost £500 a year lower than when Lehman Brothers was still around. Stronger wage growth is needed to make 2019 a better year for living standards than this one.
The UK ranks 9th in terms of wage performance among wealthy G20 nations since 2009, according to the International Labour Organization, behind Italy, Japan, Canada, the US, France, Australia, Germany and South Korea.