The Guardian — Britain has suffered a bigger fall in real wages since the financial crisis than any other advanced country apart from Greece, research shows.
A report by the TUC, published on Wednesday, shows that real earnings have declined more than 10% since the credit crunch began in 2007, leaving the UK equal bottom in a league table of wages growth.
Using data from the OECD’s recent employment outlook, the TUC found that over the same 2007-2015 period, real wages grew in Poland by 23%, in Germany by 14%, and in France by 11%. Across the OECD, real wages increased by an average of 6.7%.
The TUC found that between 2007 and 2015 in the UK, real wages – income from work adjusted for inflation – fell by 10.4%. That drop was equalled only by Greece in a list of 29 countries in the Organisation for Economic Cooperation and Development (OECD).
The UK, Greece and Portugal were the only three OECD countries that saw real wages fall.
The Treasury said the TUC study did not fully reflect living standards, which were also affected by changes to taxes and benefits. It added that the number of people in work had been rising and was above the levels of early 2008, when the economy entered its longest and deepest postwar recession.
However, the Treasury added: “There is more to do to build an economy and country that works for everyone not just a privileged few, and we are determined to do exactly that.”
The Institute for Fiscal Studies, which specialises in analysing living standards, said the prolonged period of depressed earnings had been one of the features that made both the recession of 2008-09 and the period since unusual.
Rob Joyce, an IFS researcher, said: “It is not just unusual in international terms but also unusual historically for the UK. Real wages have fallen and haven’t recovered. That’s striking.”
The pressure on UK households from weak wage growth and insecure work has also been highlighted by the Bank of England’s chief economist. He said “the majority of UK households have faced a lost decade of income” as he noted that half of all UK households have seen no material recovery in their real disposable incomes since around 2005.