According to a recent report by the Institute of Fiscal Studies, British wages have fallen further in real terms since the economic downturn that at any time in the country’s past.
Written by Chris White
The report also showed that in addition to the unprecedented rise in the cost of living, more than 30% of all British workers saw their wages either frozen or cut between 2010 and 2011.
According to the report the average British public sector worker earned approximately £16.60 an hour 2010 whereas the average British private sector worker earned approximately £15.10, but by 2011 these figured had fallen to £15.10 and £13.60 respectively.
In contrasting its findings with the findings of studies relating to previous recessions, such as the recession of the 1980’s, the report concluded that the current recession is more equal than previous recessions, with hour and wage reductions being favoured by businesses over redundancies, but that the continuation of older workers and single mothers in the workforce had squeezed out the employment opportunities of the up and coming generation resulting in a generally higher level of long term youth unemployment.
The report has arrived only days after a similar report issued by Britain’s Trade Union Congress (TUC), which found that pay in some parts of the country had shrunk by more than 10% since 2007. The TUC said that many of the wage cuts responsible were due to a desynchronization between the pace of real wage increases and the pace of inflation and cuts in full time employment.
The Labour leader Ed Miliband cited the report as evidence of a “living-standards crisis” saying in the House of Commons chamber at Prime Minister’s Question Time: “There is a lving-standards crisis that is facing families up and down the country. He’s into his fourth year as Prime Minister, and his excuse for falling living standards is: ‘Don’t blame me – I’m only the Prime Minister.’ It’s simply not good enough.”
Prime Minister Cameron conceded that living standards were under pressure, but replied over the dispatch box: “Over the last year, while we’ve lost 100,000 jobs in the public sector, we’ve gained five times that amount in private-sector employment.”
However, many are sceptical about the Prime Minister’s claims, arguing that most job growth has been mainly low-paid and part-time jobs, fuelled by mass immigration from Eastern Europe.
Up and Coming Tech: Switch your business over to the cloud and not have to worry about maintaining old hardware anymore. Get a comparison quote today from one of the leading credit card processors.
