It could be a further nine years until employees’ wages return to their 2009 value as recent research suggests Britons are just a quarter of the way through a 12 year ‘wage dive’.
The research conducted by Trade Union Congress (TUC) uses wages and inflation data, as well as forecasts from the Office for Budget Responsibility (OBR) to measure yearly wage trends against inflation and predict future outcomes.
‘Damage’ to salaries will continue
Over the last three years, the weak economy has had a damaging effect on incomes. Salaries have been kept low across the board with pay frozen in many sectors.
However inflation has continued to rise even higher than forecast, leaving many workers out of pocket in real terms. A worker on a median salary of £25,800 will have lost around £1,600 since 2009.
This trend is set to continue for a further nine year, with predictions that wages will drop further in 2013 and grow by just 0.5% after 2015. Based on OBR forecasts, it may not be until 2021 that workers’ wages provide them with the level of income they had in 2009.
Brenda Barber, TUC’s General Secretary said:
"Even when wages start to pick up again it will take years to undo the damage wreaked by austerity and high inflation."
“Unless things change the UK's 12-year wage dive will continue until 2021 and cost the average worker around £8,500. The loss of income will be even worse for families receiving vital tax credits.”
Call for action
TUC’s research claimed that higher wage rises are ‘essential’ to promote a sustainable economic recovery. They specified that these should not just be reserved for directors, managers and stakeholders but all employees.
In addition to their call for ‘decent wages for all’ and ‘an economy that works for the ordinary families’, TUC also explicated their wish to put an end to breaches of employment rights and austerity.
“Ordinary workers did not benefit enough from the proceeds of growth in the run up to the crash as profits were hoarded by shareholders and top executives. A return to business as usual will simply postpone the next living standards crisis.”
'It is clear that austerity isn't working. We need a new economic approach that delivers for all workers and their families.”