UK wages decline among worst in Europe

 
Coins in a hand One think tank said this year that the drop in wages was "unprecedented"

Wages in the UK have seen one of the largest falls in the European Union during the economic downturn, according to official figures.

The figures, which were requested by the Labour Party and collated by the House of Commons library, show average hourly wages have fallen 5.5% since mid-2010, adjusted for inflation.

That is the fourth-worst decline among the 27 EU nations .

By contrast, German hourly wages rose by 2.7% over the same period.

Across the European Union as a whole, average wages fell 0.7%.

Only Greek, Portuguese and Dutch workers have had a steeper decline in hourly wages, the figures showed.

Other countries that have suffered during the eurozone debt crisis also fared better than the UK. Spain had a 3.3% drop over the same period and salaries in Cyprus fell by 3%.

French workers saw a 0.4% increase, while the 18 countries in the eurozone saw a 0.1% drop during that period.

'Worse off'

"These figures show the full scale of David Cameron's cost of living crisis," said shadow Treasury minister Cathy Jamieson.

Analysis

These figures, requested by the Labour Party and collated by the apolitical House of Commons library, merely put into firm numbers what we've all sensed for three years or more.

The money left over at the end of each month is getting less and less because our salaries have been flatlining while shopping, petrol and energy bills have been rising steadily.

Politically, this is fertile ground. Ed Miliband talks of a squeezed middle and feeling poorer while the government talks of a nascent recovery that will eventually raise living standards across the board while putting pressure on benefit dependants.

Clamping down on inflation, which has been above its 2% target for four years, doesn't appear to be a priority for the new regime at the Bank of England.

Mark Carney et al say they will tolerate it above target until unemployment falls below 7%. The tolerance of voters might be tested in the interim as their spending power continues to erode.

"Working people are not only worse off under the Tories, we're also doing much worse than almost all other EU countries.

"Despite out-of-touch claims by ministers, life is getting harder for ordinary families as prices continue rising faster than wages."

But the government says it has tackled the higher cost of living by raising the tax-free personal allowance threshold to £10,000, taking 2.7 million people out of tax, and other measures such as freezing fuel duty.

"The economy is on the mend, but we've still got a long way to go as we move from rescue to recovery and we appreciate that times are still tough for families," a Treasury spokesperson said.

BBC political correspondent Ben Wright said: "With an economy that now seems to be gathering momentum, one of the key arguments that Labour have been making for the last two years - the government got this wrong, their economic prescription failed - is no longer as powerful a message at it was six months or a year ago."

"Which is why we are hearing a lot today about living standards."

"Labour think that if a recovery is in place but is not being felt in people's pockets, then it's not going to do the government much good at all," he said.

The GMB union said the government was "directly responsible" for the fall in wages.

"Employers paying low wages get taxpayer subsidies in the form of tax credits to assemble a workforce for them to make decent profit margins," it said.

In June, the Institute for Fiscal Studies said that a third of workers who stayed in the same job saw a wage cut or freeze between 2010 and 2011 amid a rise in the cost of living.

"The falls in nominal wages... during this recession are unprecedented," the IFS said at the time.

In 2009, the average public-sector worker earned about £16.60 per hour, which dropped to about £15.80 in 2011, the IFS said.

Meanwhile, hourly pay for private-sector workers in 2009 was just over £15.10 and dropped to about £13.60 in 2011.

 

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  • rate this
    +5

    Comment number 442.

    You can blame the Tories and Labour as much as you like. The fact is we have a system of Government in the UK where we have 3 parties that can be separated by nothing more than a sheet of toilet paper in terms of policy. Its more to do with who tells the most convincing lies. If you don't like what they say then its tough...you just don't vote. We need a new system of governance without doubt.

  • rate this
    -20

    Comment number 441.

    Get out of Europe, get the UKIP in power, stop all immigration immediately, extradite all illegal immigrants asap, keep the four United Kingdoms together and we might stand a chance to become GREAT again !

  • rate this
    +5

    Comment number 440.

    @402.captainswing1

    Labour did NOT cause the global economic collapse. That was the result of bankers and Labour had to step in to bail the bankers out.
    What % of those same bankers went to Eaton and Harrow just like the Tory leadership?
    Which governement would those same bankers prefer in charge Tory or Labour?

  • rate this
    0

    Comment number 439.

    --With all to lose --and only more of the same to win !

    --A great future.

  • rate this
    +120

    Comment number 438.

    Poor wages & low pay rises were there even before the recession began so this is nothing new. The bloodsucking Company I work for has been taken to ACAS 4 times in the last 6 years, they want more & more out of people for less and less pay. I can't afford to have a family, a holiday, or even go out anymore- I just exist for work with no r&r. I'm sick of it.

  • rate this
    +10

    Comment number 437.

    So when companies are declaring £1bn + profits, as many are, it is not just because the prices of their goods are going up, they are simultaneously screwing their own workforce.

    It's not just the government, whatever colour, to blame I'm afraid.

    Nasty times for the average man.

  • rate this
    +2

    Comment number 436.

    Set MP's wages, public sector wages & taxes to private sector wage rates and watch them suddenly start to live in the real world and actually defend core prosperity. At the moment the tax parasitic system plows on regardless of the job losses, bankruptcies, and poverty in the actual real economy, printing money & pretending we still actually create wealth that can be stolen

  • rate this
    +5

    Comment number 435.

    UK wages decline among worst in Europe

    But not for the staff at the BBC...

  • rate this
    +1

    Comment number 434.

    I think workers need to be taxed far more, interest rates go negative so banks can start taking peoples savings directly, all companies should be allowed to pretend profits in the UK don't count because they are "offshore" and therefore don't pay tax, tax credits (benefits) should be increased to further allow companies to pay workers even less and maximise their (offshore) profits.

    Perfect.

  • rate this
    -4

    Comment number 433.

    "The GMB union said the government was "directly responsible" for the fall in wages."

    Yes true, but not this government it was the last Labour "free 4 all" government.

    Today we see them creep back to the masses with the begging bowl, hopefully at the next election the electorate will tell them how much they screwed us and put them into oblivion.

  • rate this
    0

    Comment number 432.

    Hugo Grotius, nearly right: it's not what you earn or even what you take home - it's all about DISPOSABLE INCOME. That's why people on low wages are so much worse off than those on benefits with minimal outgoings.

  • rate this
    +3

    Comment number 431.

    Maybe if MORI et al could run an opinion poll that asked "If you could guarantee change to the political system would you be prepared to take to the street to achieve that aim?" Publish the results, force a debate in parliament, let the politicians know that we, the people, are no longer prepared to accept their dominance over us or their total indifference to our wishes and needs.

  • rate this
    -4

    Comment number 430.

    #402
    I couldn't agree more. The simple fact that Labour have never handed over office with more many than they inherited proves they have never been able to run the country's economy, even in the boom years!

    What is it with these blinkered lefties? Is it because Labour are like a child with a credit card and grossly overspend and then let the Tories take the flak in sorting out their mess?

  • rate this
    -4

    Comment number 429.

    These figures don't show the full picture, the increase in Personal Allowance from £8105 to £9205 for the 2013/14 tax year means that wage earners are not paying tax on £1100 of their income that they paid last tax year. For a 20% tax payer that is £220 extra in their pocket. Now recalculate your figure on that basis please and you will get a very different result.

  • rate this
    0

    Comment number 428.

    My fellow Americans, and Brits, and some others; we are no longer the productive leaders in the world. Until our wage rates become competitive, we will continue to lose manufacturing jobs and increase reliance on service jobs. Meanwhile trade imbalances will worsen as we import manufactured goods, further depressing our economies. That’s life until we turn it.

  • rate this
    +2

    Comment number 427.

    I've never really been pro or anti EU, so this isn't any sort of political point, but those figures seem to show that the EU countries are doing better than us...by quite a long way actually, 7.5% difference between us and Germany.

    So...if we are this useless WITH their help and economic relaxations, how bad would we be if we left?

    As I say, I'm not sure, but it seems quite straight forward.

  • rate this
    0

    Comment number 426.

    living standards fall by the amount that earnings fall and prices rise simple maths.You reach a time when tolerance for these cuts reaches a limit then people look for different ways to improve there lot. If history is followed this normally means some form of extreme solution, fortunately this as never happened in my lifetime but worrying about politics is not going to improve our lot.

  • rate this
    +2

    Comment number 425.

    Europe's most state controlled schooling produces robots while more creative methods across the channel encourage independent thinking and responsibility.
    That's why we buy into misinformation of mindless media, the mouthpiece of the same corporate power our government serves.
    That's why we're among the worst in Europe for a long list of social indicators. Yet blame everyone else.

  • rate this
    -24

    Comment number 424.

    The so called "decline in earnings" is not a real decline but a fall in purchasing power. This is simply because inflation has outstripped wage increases BUT for those in a job it means a little belt tightening. Not such a bad thing. We have all become "too fat" in spending terms. For example if one ditches Sky TV there is a potential saving of up to £50 PER MONTH. Freeview has almost everything.

  • rate this
    0

    Comment number 423.

    382.Andy_Pandy1968 ' In Sainsburys, tomatoes 69p per kilo. In Oz, they are nearly ten times as much. Bananas same. Cars double. etc etc'

    Oh now your' re being daft ! THE PRICE OF PETROL HAS GONE UP! which means if the margin hasn't been taken on your tomatoes it's been taken elsewhere my shopping bill isn't going down. You mentioned your wages are also twice as high !!! so what's your point

 

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