Workers see falls in real wages
This is the first fall in three years. Although wages rose 2.2% – the joint highest since the economic downturn in 2008 – inflation was higher, meaning wage earners experienced a drop in real terms.
However, earnings rose for the lowest-paid workers; those in the bottom 10% saw a hike of 3.5% in full-time earnings compared with 2016.
The average amount earned was £550 a week. Full-time workers in London earned the most with a weekly wage of £692, while Wales, the North East, Northern Ireland, Yorkshire and the Humber, and East Midlands all have, on average, earnings of £500.
Private sector wage growth outstripped the public sector, but workers in the public sector continue to earn more. Median weekly earnings for full-time employees in the private sector were £532 (up 2.8% on 2016) compared with £599 (up 0.9%) for the public sector. Private sector earnings are currently 89% of public sector earnings.
The figures also show a narrowing of the gender pay gap to 9.1%, the smallest on record. However, TUC general secretary, Frances O’Grady, said the average woman has to wait nearly a fifth of a year before she starts to get paid, compared to the average man.
“The full-time gender pay gap has inched a bit smaller. But there is still a chasm between men and women’s earnings. At this rate it’ll take decades for women to get paid the same as men.
“The government needs to crank up the pressure on employers. Companies shouldn’t just be made to publish their gender pay gaps. They should be forced to explain how they’ll close them.”
Overall, the statistics will inform Bank of England Governor Mark Carney’s decision on interest rates in November. At the moment, a rate rise of 0.25% appears to be on the cards. While this may put pressure on indebted households, it could act to curb inflation in the wider economy.