UK workers have seen sharpest wage fall of any developed economy

By agency reporter
March 7, 2013

Workers in the UK have suffered a bigger fall in real wages than any other workforce in the world's top ten developed economies, according to the Trade Union Congress's latest report on the global economic race published today (7 March 2013).

The study shows that between 2007 and 2011, real wages fell by 4.5 per cent in the UK, an even tighter squeeze than the fall seen in Italy (-2.7 per cent) and Japan (-0.7) per cent.

In contrast, wages in Australia and Canada rose by 6.9 per cent and 5.4 per cent respectively.

2011 - the government's first full year in office - accounted for the bulk of this decline as wages shrunk by 3.5 per cent.

During 2011 real wages in the UK plummeted at nearly twice the rate of Spain- the next worst-performing economy that year.

The figures highlight the extent to which the recession and subsequent economic stagnation has squeezed the incomes of ordinary workers, says the TUC.

The TUC says the government's austerity programme has made the squeeze on living standards even tighter by cutting vital tax credits and welfare support for low and middle-income families.

Unless we get stronger economic growth consumer spending will remain weak and the economy will continue to flat-line, warns the TUC.

Recent TUC analyses of the 'global race' - available at www.touchstoneblog.org.uk/tag/global-race - have found that the UK is lagging behind most of its G7 competitors on exports, GDP growth and manufacturing too.

TUC General Secretary Frances O'Grady said:"UK workers have suffered a bigger fall in wages than any other workforce in the world's top ten developed economies.

"While most countries have suffered periods of negative wage growth, no-one has witnessed such a marked decline as the UK.

"This government's blind obedience to self-defeating austerity has ensured that we are leading the way when it comes to the squeeze on living standards.

"Businesses desperately need people to spend money but employees are cutting back as their wages are squeezed. And the public sector, far from making up the gap, is being slashed too."

She concluded: "Unless we get stronger economic growth with rising real wages consumer spending will remain weak and the economy will continue to flat-line."

[Ekk/4]

Keywords:wages | uk economy | uk | recession | G7
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