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.


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

    Comment number 482.

    @413 - For his hatred of the poor and objections to democracy Cicero has been called as the most contemptible scoundrel in history.

  • rate this

    Comment number 481.

    Trendy (441) - I'm afraid your name gives the game away. Flares used to be trendy, video recorders were once all the rave, hoopla hoops kept the kids amused for hours. UKIP are just the next trend! Fashionable to like today, but heaven help us if we are stupid enough to give them power. May they go the same way as every other trend, and quickly. Believe in them, you believe in fairies.

  • rate this

    Comment number 480.

    475. Geraint Pillock
    Conservative/ Labour, it's just an illusion of democracy.
    Of course you are not under the illusion that with ANY other party that would be different.

  • rate this

    Comment number 479.

    British politics has never been such a dismal mess as today policy lines are blurred, it's all image & sound bites, no thought out initiatives even the lies are similar mainly centering on blaming each other for whatever mess there is.
    We've given up the hope of three party politics with Nick selling out the Libs.
    No wonder UKIP and BNP rub their grimy hands with their single policy lunacy.

  • rate this

    Comment number 478.

    Pheew, its all working out correctly....... perfickly going to plan..... the rich getting richer and the poor getting poorer, the post office being privitised and shares being given out to employees, so have a look at this growth & infrastructure act 2013, look at section 31 Employee shareholders, makes intresting reading

  • rate this

    Comment number 477.

    Might be because all the europeans come here to work, dropping wages here...

  • rate this

    Comment number 476.

    So wages have fallen - except if you are employed as a Member of Parliament.
    Make room at the trough, Mildred!

  • rate this

    Comment number 475.

    Conservative/ Labour, it's just an illusion of democracy.

    They both take their real orders from Bilderberg, that's why both parties attend the meetings.

    All we see is the plan being rolled out, regardless of who's elected.

  • rate this

    Comment number 474.


    Better pay those bankers more.


  • rate this

    Comment number 473.

    "immigration isn't working" - UKIP 2005

    "immigration isn't working" - Labour 2013

    After 8 years the penny has finally dropped, well done Labour.

    P.S 2+2= 4

  • rate this

    Comment number 472.

    "The International Monetary Fund in June called on France to lower its labour costs and halt tax hikes to boost both growth and its competitiveness."

    This is the advice France are being given since they are still experiencing negative growth. We as a nation are remaining more competitive than our peers. short term strife for long term stablity.

  • rate this

    Comment number 471.


    Unfortunately YOUR are the one who is blinkered. Hansard shows that Cameron and the Tories were calling for LESS regulation on the banks before the slump. Had the Tories been in power the situation would have been exactly the same. Indeed most commentators were saying that both parties, New Labour and the Tories were putting forward the same policies.

  • rate this

    Comment number 470.

    The simple fact that Labour have never handed over office with more many than they inherited proves
    Barber years, Black Wednesday, the real cost of not investing in public services, wasted oil revenues , privatisation by bribery, Thatcher's unleashing of the Pin Striped Crime Syndicates....Osbourn staked his credentials (that's not saying much I know) on UK credit worthiness

  • Comment number 469.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 468.

    Clearly George Osborne was spot on then. With such a massive drop in wages, we absolutely needed a 5% income tax cut for those who were on £150k or more in order to avoid mass hardship and suffering.

  • rate this

    Comment number 467.

    Please, not more comments blaming "Europe" or "immigration". The UK has become the most unequal country in the Western world not through either of these things, but by falling for the story that wage rises are "bad for the economy" while those at the top "deserve" their 30% pay increases. Don't blame Europe or immigration - we should blame ourselves for being supine enough to put up with this

  • rate this

    Comment number 466.

    423. never walk alone

    382.Andy_Pandy1968 ' In Sainsburys, tomatoes 69p per kilo. In Oz, 10 times more etc'


    Oh now your' re being daft ! so what's your point


    On average earnings in UK, doing average job, however much you whinge about costs, there are only 4 Countries in the world where 1 hours average pay buys more stuff.

    Do you get it yet?

  • rate this

    Comment number 465.

    The wages are very low specially minimum pay and low incomer should tied his or her belt otherwise you will see yourself doing a crime like stealing or shoplifting at the end you will go to jail.anyway this goverment should look back again the minimum pay.

  • rate this

    Comment number 464.

    Well, you only have the voters to blame who keep voting the same parties in each election. Believing the lies, the propaganda and the general PR tosh that we have to suffer.

    Leaving Europe is not the answer, voting for parties that actually care about the people is far better (Not UKIP), that actually don't think about short term policies to buy votes.

  • rate this

    Comment number 463.

    Pay shrinks in London/SE England by half as much as elsewhere. Your correspondents don't seem concerned. Are they perhaps mainly from those areas? Or perhaps just don't care?
    BTW how come this 'story' has no link to it on the TUC's website?
    Vote YES next year. Oh wait, you can' and kisses!


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