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UK – Wages drop more in UK than EU countries with higher unemployment

13 August 2013

Wages in the UK have suffered one of the sharpest declines in Europe over the last three years, according to official figures. Hourly pay in real terms – adjusted for inflation – has dropped by -5.5% since mid-2010, compared to an average decrease across the European Union of -0.7%.

The UK saw the fourth-worst fall of the 27 EU nations during the economic downturn, with only Greek, Portuguese and Dutch workers witnessing a steeper decline. The UK also fared worse than countries which have been hit particularly badly by the financial crisis, such as Spain (-3.3%) and Cyprus (-3%).

By comparison, German workers saw hourly wages increase by +2.7% over the same period, while France recorded a +0.4% rise.

The figures were requested by the Labour Party and were collated by the House of Commons library.

Cathy Jamieson, shadow Treasury Minister, claimed: “Despite out-of-touch claims by ministers, life is getting harder for ordinary families as prices continue rising faster than wages.”

But the government insisted that it was tackling this by introducing measures such as the increase in the personal tax-free allowance to £10,000.

A Treasury spokesperson added: “The economy is on the mend, but we’ve still got a long way to go as we move from rescue to recovery, and we appreciate that times are still tough for families.”

A separate analysis released by the Institute for Fiscal Studies in June revealed that in 2009, the average public-sector worker in Britain earned £16.60 per hour, which then dropped to £15.80 in 2011. Hourly pay for private-sector workers was £15.10 in 2009 and fell to £13.60 in 2011.

Meanwhile, further figures published today by the TUC could signal more woe for workers who commute by train. The trade union body said that a fare increase of 4.3% was likely to be on the cards this January, as rail operators were allowed to raise prices by 1% more than July’s RPI inflation rate (+3.3 %). 

This would mean that rail fares would be +40% higher in January 2014 than in January 2008 – the sixth time in seven years that ticket price hikes have outstripped any wage growth in the UK.

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