Real pay cut for millions of lower and middle paid workers, TUC analysis reveals

By agency reporter
August 11, 2019

Millions of employees in lower-paid and middle-income jobs have had real pay reductions over the last decade, according to new analysis published by the TUC.

The analysis looks at how occupational hourly pay has changed. It shows that, although the very lowest paid have benefited from minimum wage rises, millions of other workers in low and middle-income jobs have had real pay reductions since 2010.

Lowest earners (7.1 million people)

Real pay for workers in jobs paying less than 75 per cent of median pay (less than £9.55 an hour) has increased by five per cent since the turn of the decade (2010-2018).

But this increase is just half the rate of the prior period (2002-2010), when pay for this group rose at twice the rate (10 per cent).

The TUC says that the rise of five per cent is largely due to the positive impact of raising the National Minimum Wage faster than inflation.

Low-to-middle earners (7.7 million people)

Real pay for workers in jobs paying between 75 per cent and 100 per cent of median pay (between £9.56 and £12.73 an hour) has fallen by one per cent since 2010.

This reduction compares to a rise of seven per cent for this group between 2002 and 2010.

The TUC says that the negative impact of austerity on the economy, along with a lack of collective pay bargaining rights, are largely to blame for low-to-middle earners suffering this loss of living standards.

Middle-to-high earners (11.5 million people)

Real pay for workers in jobs paying between 100 per cent and 200 per cent of median pay (between £12.74 and £25.45 an hour) has fallen by three per cent since 2010.

The TUC says that this shows that middle-class earners have shared the negative impacts of austerity on living standards alongside those in working-class jobs; and they have common cause in needing stronger pay bargaining rights.

Highest earners (1.3 million people)

Real pay for workers in jobs paying more than twice median pay (over £25.56 an hour) has increased by four per cent since 2010.

While the percentage rise is slightly behind the lowest earners, the cash increases are much higher than for any other workers.

The TUC says the findings of this analysis show that austerity has had a bigger impact on many working-class jobs than higher-paid work. And without stronger pay bargaining rights, it will be very hard for those workers to gain fairer pay. On average, pay for union members was 7.9 per cent higher in 2018 than for non-unionised workers in comparable jobs. 

The findings also show that women, and black, Asian and minority ethnic (BAME) workers are more likely to be in lower-paid work.

The proportion of the overall workforce that is female is 49 per cent. But women account for 64 per cent of the lowest earners (those paid less than 75 per cent of average pay) and just 39 per cent of those in jobs paid at least twice average pay.

The BAME proportion of the overall workforce is 12 per cent. But BAME workers account for 15 per cent of the lowest earners, and just 10 per cent of the highest earners.

TUC General Secretary Frances O’Grady said: “Every job should pay a fair wage that keeps up with the cost of living. But many people in working-class jobs have had their real pay cut, while the best paid got rises.

“It’s not right that people who have slogged away for a decade to rescue Britain from the banking crisis are still paying the price. Working-class values like hard work should be rewarded with decent pay and security.

“The government should concentrate on rebuilding good working-class jobs with decent pay. We need a new deal at work with stronger rights, starting by giving everyone the right to be represented by a union so they can bargain for better pay.”

* Trades Union Congress https://www.tuc.org.uk/

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