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UK workers face worse Christmas wage squeeze in nearly a decade

Written by: Emma Lunn
Real wages – pay after the cost of living has been taken into account – in December 2021 are on course to be 0.8% lower than in September 2021, according to the Trades Union Congress (TUC).

The union body estimates that, in the last quarter of 2021, pay growth (+0.8%) has risen at just half the speed of inflation (+1.6%).

The TUC says the final quarter of 2021 has been the worst final quarter for real wage growth since 2012 and the second worse since comparable records began 2000.

The squeeze on wages comes as many families brace themselves for a ‘cost of living storm’ in 2022. In addition to rising bills millions of working households have been hit by the cut to Universal Credit and will be hit next year by the hike to national insurance contributions.

The TUC says that ministers must come up with a long-term economic plan to get wages rising across the economy. The union says that in addition to raising the minimum wage to at least £10 an hour, the government should work with unions and employers on sector-wide fair pay agreements, arguing that giving workers more bargaining power on pay is key to improving living standards.

The TUC warns that without action to boost pay packets, the squeeze on household budgets will continue for years to come.

Frances O’Grady, TUC general secretary, said: “People should be able to look forward to Christmas without having to worry about how they’ll pay for it. But millions are facing a cost-of-living storm as bills soar and real pay falls. After more than a decade of wage stagnation, this is the last thing working families need.

“The government can’t sit this crisis out. We need a proper plan to get pay packets rising across the economy – or the squeeze on household budgets will continue. Ministers should get around the table with unions and employers now and work out fair pay agreements for every industry. That’s the best way to boost living standards and ease the pressure on households.”

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