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Real wages 'falling since 2010'

Real wages 'falling since 2010'

Friday 31 January 2014

Real wages 'falling since 2010'

Friday 31 January 2014

Real wages have been falling consistently since 2010, the longest period for 50 years, according to a new report.

The Office for National Statistics said low productivity growth seems to be pushing wages down. Different inflation rates between what is produced and what is consumed was also highlighted. The study followed a report by the Institute for Fiscal Studies (IFS) which said that while the fall in household incomes has now probably come to a halt, living standards are still "dramatically" down on what they were before the global financial crisis hit in 2008.

The Government said last week that most British workers have seen their take-home pay rise in real terms in the past year.

Real wage growth averaged 2.9% in the 1970s and 1980s, 1.5% in the 1990s, 1.2% in 2000s, but has fallen to minus 2.2% since the first quarter of 2010, the ONS figures showed.

TUC general secretary Frances O'Grady said: "Over the last four years British workers have suffered an unprecedented real wage squeeze.

"Worryingly, average pay rises have been getter weaker in every decade since the 1980s, despite increases in productivity, growth and profits. Unless things change, the 2010s could be the first ever decade of falling wages.

"A return to business as usual may only bring modest pay growth. We need radical economic reform to give hard-working people the pay rises they deserve."

Asked whether the Prime Minister was concerned about the evidence of falling real-terms wages, David Cameron's official spokesman told a Westminster media briefing: "Should we deplore the fact that Britain has been made poorer as a result of the great recession of 2008/09 and as a result of the financial crisis?

"The Prime Minister has been very clear about the mistakes that were made at the time and the long-term economic plan which the Government has had to put in place to address it."

Shadow chief secretary to the Treasury Chris Leslie said: "The Tories are so out of touch they deny there's a cost-of-living crisis, but these figures show the biggest fall in real wages since records began 50 years ago.

"Wages after inflation have fallen by 2.2% a year since 2010. But while working people are worse off under David Cameron, he has chosen this time to give the richest 1% of earners a huge tax cut.

"Labour will act to ensure we earn our way to higher living standards for all and tackle the cost-of-living crisis."

Unite union general secretary Len McCluskey said: "These figures expose the Government's shocking complacency. The bald truth is that the cost of living in this country is vastly outstripping wages. David Cameron has presided over horrific price rises in essentials like food, fuel and travel but he's done nothing to alleviate this pain.

"Last week the Government used highly selective figures to try to spin the nation and claim that average pay is rising. Today's report is damning proof that the Government was trying to pull the wool over our eyes."

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