UK workers will miss out on £3,600 in pay this year as a result of wages not keeping pace with the OECD
- “International outlier” – UK is 27th out of 33 among OECD nations for wage growth since the financial crisis
- UK workers have suffered a “double whammy” of high inflation and “historically poor” wage growth
- The TUC says ministers “must stop scapegoating workers” and come up with a credible plan to lift living standards and boost growth
UK workers will miss out on £3,600 this year in pay as result of their wages not keeping pace with the OECD average, according to new TUC analysis published today (Monday).
The analysis shows how the UK’s “abysmal” wage growth since the financial crisis has resulted in 15 years of pay stagnation – with average real pay still 2.7% down compared to 2008.
By contrast, real wage growth across the OECD as a whole has risen by 8.8%, on average, over the same period.
This has left UK workers massively out of pocket compared to their peers in other countries.
Pay gap to worsen
According to the analysis the pay gap between the UK and the OECD will get worse over the next year.
The TUC estimates that based on current OECD forecasts, workers will miss out on an additional £3,800 next year as a result of UK wage growth continuing to lag behind.
International outlier
The union body highlighted how by 2015, wage growth in most other OECD countries had returned to pre-crisis levels.
But even now real wages in the UK are below their 2008 levels.
The analysis found the UK languishing “in the relegation zone” on wage growth among OECD countries – sitting at 27th place out of 33.
Double whammy of high inflation and poor wage growth
The TUC says UK workers are being hit by a double whammy of high inflation and historically poor wage growth.
The UK is currently suffering the highest rate of inflation of any of the G7 countries – and the longest pay squeeze in more than 200 years.
The TUC says years of pay cuts have left workers across the country “brutally exposed” to the rising cost of living.
Stop scapegoating workers
The TUC has called on ministers to stop scapegoating workers for rising inflation.
While real wages are falling across the board, recent TUC analysis showed that nominal pay growth was only accelerating for the top 10% of earners – while it is slowing for the rest of the workforce.
Workers among the top 1% of earners, with an annual income of at least £180,000, have seen their pay growth more than double [to 7.9% from 3.7%] since the turn of the year.
But workers on the median salary – receiving £26,600 a year – saw a steep fall in annual wage rises, as it halved [to 4.7% from 9.5%] since the turn of the year.
The TUC says that instead of blaming workers, ministers should focus on a credible plan for sustainable growth and rising living standards.
TUC General Secretary Paul Nowak said:
“Everybody who works for a living deserves to earn a decent living. But workers up and down the country are suffering a pay loss of historic proportions.
“Since the financial crash, in most parts of the world workers have seen their real wages go up. But the UK has been an international outlier on pay with family budgets being shredded.
“The abysmal wage growth of the past 15 years has left UK households brutally exposed to the current cost of living crisis.
“UK workers are being hit by a double whammy of uniquely high inflation and really poor wage growth.
“Instead of scapegoating workers who are just trying to keep their heads above water, ministers must come up with a credible plan for sustainable economic growth and raising living standards.
“Without action, the UK will continue to lurch from crisis to crisis.”
Commenting on the ongoing strike action, Paul Nowak added:
“After the longest wage squeeze in modern history, workers have been forced into taking action to defend their living standards.
“Ministers must get around the table with unions and resolve the ongoing pay disputes.
“If they fail to do so, the exodus of staff from our schools and other public services will continue.”
