Four-year real wage fall will cost average worker £6,000
The average worker will “lose around £6,000 by 2014 as a result of wages failing to keep pace with rising prices”, according to new TUC analysis published ahead of the latest inflation figures today.
The TUC calculates that a worker on a median salary of around £25,000 has already lost nearly £4,000 since December 2009, when earnings first fell behind prices. Real wage growth was expected to return in 2013. However, in its latest update published in December 2012, the Office for Budget Responsibility put its forecast for real wage growth back until 2014.
The TUC says: “With real wages now expected to fall for another year, the average worker is set to lose a further £2,000 in 2013, bringing the total wage loss to £6,000 by the time earnings finally start to rise at the same rate as prices in 2014.”
It adds: “The TUC is concerned that the UK's living standards crisis is putting people's finances under immense pressure and holding back the economy by depressing consumer spending.”
A final word
“The average worker has already lost £4,000 and could lose another £2,000 this year. This massive squeeze on earnings, combined with sharp cuts to vital welfare benefits and tax credits, is hurting millions of people with food, transport and energy bills taking up an even larger share of family budgets.
“We urgently need decent wage rises, which will feed through into more consumer spending and wider economic growth. But with the government still committed to self-defeating austerity, the prospect of a return to healthy pay rises is looking further and further away.” - Frances O'Grady, TUC General Secretary.
Want to know more?
To read the TUC analysis visit www.tuc.org.uk/economy/tuc-21819-f0.cfm.