You are here: Home - Saving & Banking - News -

Real wages to shrink £1,750 over next two years

Written by:
UK workers are set for the worst wage squeeze in modern history and will face the tightest contraction in pay of any G7 economy, analysis reveals.

Real wages in the UK are forecast to shrink by 6.2% (£1,750) over the next two years. This is steeper than any other G7 nation, Trades Union Congress (TUC) analysis of OECD figures revealed.

It said the comparison of international pay trends also shows how real wage growth will bounce back much faster in other nations.

As an example, Italy – the second worst hit economy – will see real wages fall 3.2% this year, but will then be down just 0.7% in 2023.

Meanwhile UK wages are forecast to fall by 3% next year while France and the United States are forecast for 0.5% and 0.6% wage growth between 2022 and 2023, respectively.

As such, the TUC said UK workers are suffering the longest and harshest pay squeeze in modern history.

It comes as its previous analysis revealed the average worker has lost nearly £20,000 in real earnings between 2008 and 2021 as a result of pay not keeping up with inflation.

Further, it’s been over a decade since the financial crisis, but workers are still earning £75 a month less in real terms than in 2008.

It is calling for a significant rise in the national minimum wage, a real-terms pay rise for public sector workers to help restore earnings lost over the last decade and for Universal Credit to be raised to 80% of the real Living Wage.

‘Bottom of the league for pay growth’

Outgoing TUC general secretary, Frances O’Grady, said the top priority for the next Prime Minister should be to get wages rising across the economy.

She said: “Making ends meet shouldn’t be a battle. But UK workers are suffering the worst pay squeeze in the G7 and the longest in modern history.

“Years of standstill wages have left households brutally exposed to this cost-of-living crisis.

“The number one priority for Tory leadership candidates should be to get pay rising across the economy.

“This is the best way to give people long-term financial security and to stop families from lurching from crisis to crisis.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Seven ways to get help with energy bills this winter

We knew today’s announcement was going to be painful, but it’s still a shock to the system. When this kick...

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week