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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  • Comment number 462.

    All this user's posts have been removed.Why?

  • rate this
    +1

    Comment number 461.

    Very interesting figures at the end of the piece! From 2009 to 2011 you were better off working in the public sector than the private sector. How did that come about? Nu-Labour, that's how! Thought gold-plated public sector pensions only existed because public sector workers accepted lower salaries than in the private sector for similar job! I will never vote Lab again. Not Con either. Nor Lib.

  • rate this
    0

    Comment number 460.

    The inference is that Spain, Portugal, Cyprus and other basket case economies are faring better than the UK.....utter nonsense. The stats supporting the claims are based on the % reduction in wages without indicating what wages were in absolute terms and what they are now ....and also taking into account the standard of living and economic performance It's a typical Labour dodgy dossier

  • rate this
    +1

    Comment number 459.

    Stop complaining and be happy that you are giving one billion a month overseas to people who who are so grateful and would be the first to come to our aid should we need it and who would never even think of hurting anyone trying to help them. Also who needs the money we give to Europe when we are happy to let them rule us and as for that halal elephant in the room - nobody will notice or care.

  • rate this
    -1

    Comment number 458.

    417.Tchernobog
    'The only jobs that will grow under your scenario are those of gang masters etc..'
    Really well you obviously don't have a clue as imports rise intelligent people can produce those goods for less in the country !! without the labour force they can't . Alternative is to keep on lending and blow it away it's narrow minded people like you who have obviously got lazy and want a free ride

  • rate this
    +4

    Comment number 457.

    Not just that wages are falling the rights of the workers are being reduced, management however are having their wages increased, as are the MP's if they can get away with it and what are the opposition parties doing, sitting on their hands silently.

  • rate this
    0

    Comment number 456.

    lol my company gave us a 3% rise in june and we get about the same rise every year, also is on an average wage of 13-15 quid and hour.

  • rate this
    +1

    Comment number 455.

    look over the last 10 years the steepest fall by far was in germany! also germany have the second biggest low wage sector after lithuania in the EU and no minimum wage!

  • rate this
    -98

    Comment number 454.

    People complaining about a drop in wage should just be happy they live in an area with jobs which actually pay more than minimum wage in the first place.

  • rate this
    -1

    Comment number 453.

    the Labour party imported cheap immigrants to vote for them, the result is low wages

  • rate this
    +2

    Comment number 452.

    What are you on about Jim (# 420) can't understand your English at all! It is little wonder you can't get a job! And #384, Ketchup - why should he give over any of his money?! What if someone said the same to you.Gon't use the taxman as an excuse - we all have to pay tax. #374, private sector (esp in IT) has been laying off highly paid people - to lower cost base - and hiring 'cheaper' labour!.

  • rate this
    +3

    Comment number 451.

    This is why our unemployment rate is 7.8% while the Eurozone's is 12.1%.

    To those complaining about falling wages, is unemployment a price worth paying?

  • rate this
    +4

    Comment number 450.

    I wont deny this is bad news, but the article title is misleading. I'm still getting paid FAR more for the job I do here than I would in Italy, which I can assure you, has seen no improvement on its wages either. I've got friends in the Netherlands whom are doing okay as well. Im sure we are going to get the usual 'I hate the UK' whingers on here,but does moaning do anything really???

  • rate this
    +2

    Comment number 449.

    The mve to a basic wage plus bonus, by many employers has led to this. For the last ten years of my employment I barely got a pay rise, and that was before the recession. Let's get shot of bonuses and go back to decent basic wages. (And yes I did get bonuses - but they are not a replacement for decent basic pay.)

  • rate this
    +4

    Comment number 448.

    Despite of all this, our Govt. is at the forefront when it comes to supporting the rebels (a.k.a terrorists) in Syria.
    LOL

  • rate this
    -3

    Comment number 447.

    Frankly, I'd vote for the Devil himself if he would sort out the UK population rise and immigration and I doubt if I am alone. So many of our inherent problems are down to the size of the population.

  • rate this
    -1

    Comment number 446.

    "No, Germany did not get where it is from nowhere. We have union representatives... And most and foremost, we have a sentence in our constitution that goes like this:
    Art 14: Owning property carries responsibility. Its use should benefit society.
    The UK could do with such a principle."

    How tragic that it was the UK WWII coalition that wrote it.
    Only Attlee and Heath went for it here.

  • rate this
    0

    Comment number 445.

    This was bound to happen as wagers start to become equal throughout Europe and that is just a fact of being in Europe. People should either accept this, or think of pulling out of the EU. Labour will stay in the EU whatever the cost is to the British people.

  • rate this
    +1

    Comment number 444.

    428We've exported jobs that are dangerous, tedious, unskilled to places where wages are below subsistence, where life is cheap, where there are no restrictions to polluting the air and water, where industrial accidents have no consequences for employers, and where exploitation of labor is the norm.That's why your laptop and tablet cost $400 instead of $2000.You want to work under those conditions?

  • rate this
    +5

    Comment number 443.

    It's high time the people of this country let this bunch of clowns know what we think, for too long have scapegoats (the poor, the disabled, immigrants, anyone with an extra bedroom & anyone not towing the tory line) been used to apportion blame and take attention off the fact governments are not trying to do the right things for this country's majority.
    It is time the ordinary people spoke up!

 

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