UK set for “worst real wage squeeze” in the G7
- Real wages forecast to slump by over 6% over the next two years
- Conservative government has consigned Britain to the “bottom of the pay league” says union body
- Average real wages set to plummet by £1,750 over 2022 and 2023
- “Top priority” for next Prime Minister should be getting pay rising, says TUC
UK workers are set for the “worst real wage squeeze” among G7 nations, new TUC analysis of OECD figures has revealed today (Friday).
The analysis shows that real wages in the UK are forecast to shrink by 6.2% (-£1,750) over the next two years – the tightest contraction in pay of any G7 economy.
The comparison of international pay trends also highlights how real wage growth will bounce back much faster in other competitor nations.
In Italy – the second worst-hit economy – real wages are set to be down by just 0.7% in 2023.
But in the UK wages are forecast to fall by 3.0% in 2023.
Worst wage squeeze in modern history
The TUC says UK workers are suffering the longest and harshest pay squeeze in modern history.
Previous analysis published by the union body reveals that working people lost nearly £20,000 in real earnings between 2008 and 2021 as a result of pay not keeping pace with inflation.
And more than a decade on from the financial crisis UK workers are still earning £75 a month less – in real terms – than in 2008.
The TUC says years of wage stagnation have left families “brutally exposed” to Britain’s cost of living crisis.
Get wages rising
The TUC said “the top priority” for the next Prime Minister should be to get wages rising across the economy.
The union body warned that without action to boost pay packets families will keep “lurching from crisis to crisis.”
The TUC highlighted how Boris Johnson and Rishi Sunak committed on 20 separate occasions to a create a “high-wage economy” over the past year.
TUC General Secretary Frances O’Grady said:
“Making ends meet shouldn’t be a battle.
“But UK workers are suffering the worst pay squeeze in the G7 and the longest in modern history.
“Having repeatedly promised a high-wage economy, the Conservatives have consigned Britain to the bottom of the league for pay growth.
On the need to boost wages, Frances added:
“Years of standstill wages have left households brutally exposed to this cost of living crisis.
“The number one priority for Tory leadership candidates should be to get pay rising across the economy.
“This is the best way to give people long-term financial security and to stop families from lurching from crisis to crisis.”
The TUC is calling for:
- A significant rise in the national minimum wage
- Strengthening collective bargaining rights to boost pay across the economy
- A real-terms pay rise for public sector workers with a move towards restoring earnings lost over the last decade
- Raising Universal Credit to 80% of the real Living Wage
