Yahoo Finance UK workers face 'longest pay squeeze in centuries'
British workers are facing the “longest pay squeeze in centuries,” according to a new analysis of earnings by Britain’s biggest trade union body.
The average UK worker is more than £14,000 worse off than they would have been if their pay had kept up with inflation over the past decade, according to the Trades Union Congress (TUC).
Real wages remain lower than before the financial crisis more than a decade ago, while unsecured household debt has risen by a third as families borrow to cover shortfalls, the TUC study found.
Recent official figures show average earnings and employment levels rising, but the UK economy has struggled with sluggish economic growth, productivity, investment and pay rises over the past decade.
The TUC said household debt had risen 1.5 times faster than wages since 2010 in an era of low interest rates, despite widespread concern in the wake of the financial crisis at levels of consumer borrowing.
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The group’s analysis of official government data also showed the number of individuals declared bankrupt after failing to pay their debts reached 115,000 last year, its highest since 2010.
TUC general secretary Frances O’Grady said: “People are working harder than ever but wages have stood still for over a decade. Millions of households have been pushed to the financial cliff edge.”
The TUC is calling for controversial zero-hour contracts to be banned, and for a Brexit deal that protects jobs and rights at work.
It comes a day after the UK government trumpeted its plans to give millions of low-paid workers a pay rise by hiking the legal minimum wage, now known as the ‘national living wage,’ to two-thirds of average incomes by 2024.
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A government-backed review found similar hikes in the legal minimum organisations have to pay their staff had “negligible or zero” impact on employment levels in Germany, the US and other countries.
Chancellor Sajid Javid said the new review showed “the evidence is clear that our approach is the right one,” and promised to “end low pay.”
The timing of the announcement by the Treasury is likely to raise eyebrows, coming just weeks before the governing Conservatives head to the polls.
John McDonnell, Labour’s shadow chancellor, said the five-year wait for the minimum wage reach two-thirds of average incomes was an “insult to our hard-working people.”
He said: “It's a derisory offer which people will have to wait years for.
“Labour will immediately introduce a real living wage of £10 an hour for everyone 16 and over, outstripping every publicity stunt figure the Tories invent."
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