Wales politics

Wales workers' pay falls 8%, says Trades Union Congress

Cash
Image caption TUC blames the fall on inflation, reduced hours and more part-time working

Total pay earned in Wales has fallen by more than 8% since the financial crisis started, according to unions.

Although there are broadly the same number of people working now as in 2007, the Trades Union Congress (TUC) says the wage bill is £2.3bn less.

The figures from the Office for National Statistics show earnings are roughly where they were in 2003.

Business leaders said pay restraint was crucial in protecting jobs in tough economic times.

The TUC says the UK's total pay packet fell by 7.5% over the last five years.

It equates that to a real terms annual cut of £52bn in 2012 with the UK's overall pay packet falling to £638bn last year.

"Over the last five years, workers in Wales have taken a massive hit in their pay packets, while thousands more have had to reduce their hours or take lower paid work," said Wales TUC general secretary Martin Mansfield.

'Unsustainable debt'

"Shrinking wages are hitting people's living standards, holding back businesses and damaging our growth prospects. Britain desperately needs a pay rise.

"While economic growth is the key challenge facing the UK today, the years running up to the crash taught us that growth without wage gains just creates more unsustainable debt."

The TUC said north-west and south-west England had seen the sharpest cuts - 10.6% and 10.1% respectively.

It blamed a fall in the real value of wages because of inflation, reduced hours and changes in employment, such as more part-time working.

Neil Carberry, director for employment and skills at the Confederation of British Industry, said: "Pay restraint, though tough for many, has been crucial in protecting jobs and keeping people in work in the toughest economic climate for decades.

"The alternative for many businesses would have been to make staff redundant, but instead we've seen around a million new private sector jobs created in the last three years.

"The national minimum wage is already set at the right level, with tens of thousands of firms paying more if they can afford to do so."

Mike Cherry, national policy chairman at the Federation of Small Businesses, said: "At a time when economic growth is elusive and business confidence still fragile, it is understandable that many companies have been putting the annual pay rise on hold.

"In many low-skilled sectors, businesses already run on very thin margins, which means there is limited scope to increase wages even at the best of times, when the economy is performing strongly.

"Small employers will pay their employees more if they can afford it."

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