The TUC has published a report highlighting the effects of inflation on workers’ take home pay – with a loss of an average of £8,500 in real term wage losses.

The research, which tracks wage and inflation data between 2009 and 2012 – as well as forecasts from the Office for Budget Responsibility (OBR) from 2012 onwards – shows that UK workers are just a quarter of the way through the UK’s 12-year wage dive.

Brendan Barber, TUC General Secretary, said: “The dire state of the economy has pushed down wages. Workers today are on average nearly £1,600 poorer than they were three years ago.”

Wages have been struggling to keep up with rising costs of living, as the economic gloom has kept pay down with wages frozen across the public sector.

This tough economic climate, combined with higher than forecast inflation, has meant that a worker on a median salary of £25,800 in 2009 has lost around £1,600 over the last three years.

The OBR predicts that wages will continue to get smaller until 2013, and that real wage growth after that point will be very weak – growing by just 0.5 per cent a year in real terms after 2015.

Barber continued: “Even when wages start to pick up again it will take years to undo the damage wreaked by austerity and high inflation.

“Unless things change the UK’s 12-year wage dive will continue until 2021 and cost the average worker around £8,500. The loss of income will be even worse for families receiving vital tax credits.

“Ordinary workers did not benefit enough from the proceeds of growth in the run up to the crash as profits were hoarded by shareholders and top executives. A return to business as usual will simply postpone the next living standards crisis.”

The TUC has calculated that, based on current OBR forecasts, workers will have to wait until 2021 to get back to the level of income they had in 2009.

The average wage loss for workers over this 12-year wage dive is more than £8,500.

The TUC says that low wage growth is depressing people’s living standards and holding back the prospects of an economic recovery.

The trade union also states that the economy needs greater support through investment in growing industries, workers’ pay negotiations and an end to ‘attacks on employment rights and a reversal of self-defeating austerity’.