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
    +1

    Comment number 1562.

    Better together?

  • rate this
    0

    Comment number 1561.

    I've just read the Editors' Picks.

    What sort of people negatively rate a suggestion that pay rises should be linked to productivity (54), and another recommending saving £50 per month by axing Sky (424)?

    The only answer I can come up with is devotees of Sky (odd to find them here), and those who dislike the idea of efficiency.

    Are these the same people who say the country has gone to the dogs?

  • rate this
    +2

    Comment number 1560.

    It is an economic downturn. What should we expect?

  • rate this
    0

    Comment number 1559.

    I thought I read a story on the BBC a few months ago about Industrialists thinking about 'mining' passing asteroids. There are ppl who are very poor in the World and deserve a basic life. The perversion is complete we cry out for punishment.
    You'd be allowed to protest but I'd wager if ppl made a serious attempt to get into Government they'd be mown down.

  • rate this
    0

    Comment number 1558.

    Dang I hope the really rich and Corporations are doing OK.

  • rate this
    -1

    Comment number 1557.

    I am flabbergasted a long last the BBC news report a news which is know by the majority of families in the UK bat if you think this bad spare a thought for the pensioner if we take in consideration the items ware the pensioner spend the majority of there income the pensioner spending power is dawn by 25% or more and the normal working people is well above 5.5 %.

  • rate this
    +1

    Comment number 1556.

    1545 Graphis

    I lived in the Midlands at the time, I was earning considerably less than the national average wage and I'm certainly not an idiot. However you father might have been if he was working for less than the student grant in 1974, which was £605 p.a, or £12 p.w.

  • rate this
    0

    Comment number 1555.

    1551.RIGHTONTHERISE
    Come on even the average BBC arts graduate can see the connection; or is the plain truth just too off message?
    /////////
    No, just too, ahem, simplistic.

  • rate this
    -1

    Comment number 1554.

    UK Sucks

    Retirement Plan
    Third World is more affordable than Flip UK

  • rate this
    +3

    Comment number 1553.

    To get a realistic comparison of the fall in wage rates, across Europe, British pay rates need to be adjusted by converting them into Euros at 2010 exchange rates, and the again now. it will be clear that British workers have lost out even more. Better still, try comparing 2013pay rates with 2007 when the GB Pound stood at around 1.50 Euros, and you really see how much poorer UKworkers have become

  • rate this
    +1

    Comment number 1552.

    1522.Worldweary1
    Yet another indication of the desperate state Labour left the UK in before they were kicked out.
    ////////
    Except they weren't kicked out. The LibDems decided to go with the Tories instead, a decision they have regretted ever since.

  • rate this
    +3

    Comment number 1551.

    At the risk of being gagged by Editors picks the main reason for our very high drop in real wages is our very high import of cheap labour through uncontrolled immigration.

    Are the two mysteriously disconnected; the price of Labour and the Demand and Supply of it?

    Come on even the average BBC arts graduate can see the connection; or is the plain truth just too off message?

  • rate this
    +2

    Comment number 1550.

    Companies pay minimum wages, Companies make big profits, wages are bumped up by tax benefits. Companies should pay living wages to start with.
    Each year we take this as we are told this is as good as it gets and you cant expect any better.
    Rents in London are obscene, they need to be capped.
    Stop sending £11 Billion in aid abroad until we can stand on our own again.

    George Carlin got it right.

  • rate this
    -1

    Comment number 1549.

    1519 SH bias censors you mean in the BBC - the NUJ ? The labour party asked the parliamentary question on which the story is based and as evidenced by this weeks comments from their MP's and their own front bench, they would rather engage in this form of outrage politics rather than developing any cogent policies.

  • rate this
    0

    Comment number 1548.

    DunGeonson@1516
    "no sympathy"
    Frustration understood
    When do victims become perpetrators?

    What lessons are there from 1930s Germany for 2015 UK - ineffectual politicians risking 'need' for a strongman again - with victims lined-up to take 'the blame'?

    Is there any saving those who enter 'adulthood' supremely ignorant?

    BBC not yet geared up to educate those deafened by 'noise', but truth asserts

  • rate this
    +1

    Comment number 1547.

    Vote for the same old tired parties and this is what you will get. We all know that, but will the majority ever learn. Between Labour and the Tories, the rich will get richer the non-working class will be taken care of (if it's Labour) and those in the middle on modest wages will be bled dry. Same old, same old.

  • rate this
    +8

    Comment number 1546.

    So many buffoons saying the unemployed should start their own business etc?

    Its amazing you are even able to dress yourself never mind make a living

    2.5++ mil unemployed. How many gaps are their in the market for a new business? if they did at best means tens thousands of new companies in direct competition with each other & likely nearly all would fail?

    Lucky & completely oblivious to reality

  • rate this
    +2

    Comment number 1545.

    1527. DGARM
    "In 1974 I earned £25 p.w."

    Well clearly you had a better job than my dad. Maybe in a different area, where wages were higher. Doesn't mean what applied to you applied to everyone else in the country. Wages are still different all over the country, for the same job. Stop thinking your own experience was the same as everyone else's. Idiot.

  • rate this
    -4

    Comment number 1544.

    Over a medium to long term, wages can only be as high as output allows - unless you want the government to borrow on your behalf to pay higher wages - your company could do the same, but the creditors will soon be at the door.

    You may not like this fact - deep down you may feel you have to disagree with it - but it does not stop it from being a fact.

  • rate this
    +5

    Comment number 1543.

    Really amazing that this story is regarded as in any way "news". Surely we all knew that this would be an objective of a Tory-dominated coalition? They'll always want to decrease the share in the economy taken by labour, to increase the share taken by capital. Just look at the upward trend in the FTSE100 and you'll see the success of their policies. A poor and cowed workforce is what they want.

 

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