NEW ANALYSIS from the Trade Union Congress (TUC) reveals that 2022 has been the worst year for real wage growth in nearly half a century. The analysis of official statistics reveals that real wages (that is, wages after the cost of living has been taken into account) have slumped by 3 per cent over the course of 2022. 

This is the sharpest fall in real wages since 1977 and the second worst on record since 1945. Working people have lost, on average, £76 a month in 2022 as a result of their pay not keeping pace with inflation.

Key workers in the public sector have been hit hardest. The government’s decision to hold down public sector pay means that public sector workers have lost, on average, £180 a month in real earnings over the past 12 months.

Many of the UK’s essential workers have seen their wages plummet in 2022:

  • Nurses’ real pay fell by £1,800 over the last year
  • Paramedics’ real pay fell by £2,400 over the last year
  • Midwives’ real pay fell by £2,400 over the last year

The union body say the real wage losses suffered by public service staff this year come after a decade of “pay suppression” in the public sector.

Nurses are earning £5,000 a year less in real terms than they were in 2010. And for midwives and paramedics this rises to over £6,000.

UK workers are currently enduring the longest pay squeeze in more than 200 years – with average pay still worth £85 a month less than in 2008. In the public sector average pay is down by £204 a month in real terms compared to 2008. The TUC says the current wave of industrial action in Britain is the result of workers “being pushed to breaking point” by years of pay austerity, and repeated its calls for ministers to engage in meaningful pay talks.

The TUC says that rather than holding down wages, ministers should be working with unions to boost workers’ living standards and spending power. The union body said it was “nonsense” to claim that raising wages would hike inflation and that any serious plan for improving growth must involve putting more money back into workers’ pockets. It warned that without action to boost pay packets, the squeeze on household budgets will continue for years to come.

Frances O’Grady, TUC General Secretary, said: “People should be able to look forward to Christmas without having to worry about how they’ll pay for it. But family budgets have been shredded by soaring bills and more than a decade of pay being held down.

“The Conservatives have presided over the longest real wage squeeze in over 200 years. That is a badge of shame. The Tories’ failure to get pay rising has left millions of households brutally exposed to the cost of living emergency. “It’s time to reward work – not wealth. We cannot be a country where NHS and teaching staff have to use foodbanks, while City bankers are given unlimited bonuses.”

On the prospect of more strikes, O’Grady added: “Nobody takes strike action lightly. But workers have been pushed to breaking point by years of wage stagnation. If there are strikes across different sectors this winter the government only have themselves to blame. They have chosen to hold down the pay of our pandemic heroes and make the staffing crisis in our public services worse.

“Where unions are allowed to negotiate with employers they’re winning better deals – from buses to BT. But this Conservative government is preventing meaningful negotiations from taking place. Ministers seem more interested in escalating disputes than resolving them.”

Figures for real wage cuts are based on TUC analysis of ONS Average Weekly Earnings Total Pay figures, CPI inflation, OBR forecasts and Bank of England Millennium of Macroeconomic Data. 2022 figures are based on latest OBR forecasts for the whole economy, and projections for ONS AWE public sector pay based on 2022 so far. Comparisons to dates before 2000 are based on the Bank of England’s Millennium of Macroeconomic Data.

* Source: Trades Union Congress