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 722.

    563. Christopher Talbot
    Time for a revolution. Who is with me?


    What? To talk about it in a pub? People have been talking revolution in this country for decades and guess what....

  • rate this

    Comment number 721.


    I saw recently on a TV news item that people are being paid £10-£11 per hour to pick fruit.


    Thats piece rate.

    Anyone who's worked on a fruit farm will tell you the only people who come close to getting that are the migrant workers who start at dawn stop in the dark & take no breaks.

  • Comment number 720.

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

  • rate this

    Comment number 719.

    All the Tories out in force saying its our own fault and WE eared too much in the boom years?
    What utter Rubbish

    Firstly the Thatcher council house give away was the start of the downfall and then selling every national utility to the RICH party friends.

    George Osbourne is doing exactly the same thing with his new home buy schemes which will fuel more buy to lets for the Rich Tories,

  • rate this

    Comment number 718.

    Comparing another country with the UK on HYS has no meaning whatsoever. Lifestyles, wages and living costs are totally different.

  • rate this

    Comment number 717.

    Well, surprise,surprise - a Tory-led government overseeing a real cut in workers' wages.And the Labour response? I'm sure Cathy Jamieson is good but where on earth,literally,are Labour's leaders? Ed and Ed get back on the case - people disadvantaged by this government deserve much better representation.But maybe the strategy after all is to lose the next Election.If so,go, and let Burnham lead.

  • rate this

    Comment number 716.

    So What ? The government don't listen to the people, the people sit and complain but don't do anything about it and you can put what you like on here it will not matter as no one of importance reads it. And on a final note how many of you actually got of your bums and voted?

  • rate this

    Comment number 715.

    #667 "I have advertised a job for £16k, flexible hours, full training"

    Pitched at what age range and where? There's no way that represents a liveable wage for an adult or anyone with rent / mortgage to pay.

  • rate this

    Comment number 714.

    Started since mid 2010 & this is Cameron & Osborne idea of getting people back into work which most can't even live on,if incompetence government made sure people could earn a living wage+ instead of coming out with politics that only help the owners & bosses people wouldn't need state help to subsidise their wages to pay ever rising bills

  • rate this

    Comment number 713.

    Time for a vote of no confidence. Labour needs to get its act together and form a credible opposition. Hobson's choice until then ...

  • rate this

    Comment number 712.

    I'm astonished that no-one seems to have realised that if incomes were distributed more evenly, the considerable majority of people would be better off, and aggregate costs would be no higher, so no less competitive. Current pay differentials are in no way justified by differences in productivity or value, but government perpetuates them through employment legislation.

  • Comment number 711.

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

  • rate this

    Comment number 710.

    Not sure why some of you think that execs on super high salaries can be stopped by shareholders. In reality it hardly ever happens. The large shareholders never want to rock the boat.

    The only real solution is to tax heavily above £30,000. And to raise the tax free allowance up to £18,000.

  • rate this

    Comment number 709.

    688.Liva I suppose nobody has heard of Latvia in Europe, Britain or EU. For you all to know - average pay in Latvia is about 700 pounds A MONTH, minimal wage - about 2 pounds an hour. Poor British people, hope they don't starve!

    P.S. Latvia will become the 18th state of Eurozone on 1st January 2014

    Makes you wonder why they're so desperate to get to the UK doesn't it?

  • rate this

    Comment number 708.

    all these tory morons claiming fat cat directors make companies so much money and workers are just a drain could you tell us if these fat cat waste of space and money make so much for companies why are not everyone fat cat directors.
    That's right FCD don't make companies any money its the workers who make money the best directors do is cost a little less than other FCD never a source of income

  • rate this

    Comment number 707.

    Our football clubs have spent approx 350 million, so far, buying and selling people.The majority of the big clubs haven't started yet.
    Do you think that sounds like a country in trouble?
    I do.

  • rate this

    Comment number 706.

    @662 Briot
    "Germany by contrast has always invested in its economy and has never spent above its means"
    Germany has done well by bearing down on workers' wages and exporting to countries foolishly enticed into the Eurozone on a false prospectus. Let's leave the misleading comparisons with other countries and concentrate on viable solutions for UK problems, but without being narrowly UK-centric.

  • rate this

    Comment number 705.

    Someone told the can have it all and got them a credit card...they believed it but didn't know it had to be paid 29%.

    The dream being sold was/is an illusion.

    Just makes one want to throw their hands into the air and scream......beam me up, there is no intelligence here!!!!

  • rate this

    Comment number 704.

    When times are hard everyone has to take a cut. 35 hour week, nice idea for some (council workers maybe) not viable. Get up to speed in the real world. 50-60 hours for enough to live on. Holidays. when did they start??
    If you don't like the pay from your employer, try working for yourself. That's the ultimate freedom.

  • rate this

    Comment number 703.

    £15 and £13hr??? Calculate the median'll find things are much worse! Living costs through the roof. Put a stop to housing being an 'investment' and get the country far more self sufficient.


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