Real wages have been falling consistently since 2010, the longest period for 50 years, according to the Office for National Statistics, which said that low productivity growth seems to be pushing wages down.
The ONS study followed a report by the Institute for Fiscal Studies (IFS)which said that while the fall in household incomes has now probably come to a halt, living standards are still “dramatically” down on what they were before the global financial crisis hit in 2008. The IFS analysis suggested “there is little reason to expect a strong recovery in living standards over the next few years”. According to the Office for Budget Responsibility, real earnings are not expected to return to their 2009-10 levels until 2018-19.
The government said last week that most British workers have seen their take-home pay rise in real terms in the past year.
Jobs website Adzuna showed in a report that salaries dropped to a 16-month low in December, equal to a real-term drop in wages of £2,136. In the year to December, salaries fell in every region of the UK aside from Wales, where salaries have risen 4.1% over the 12 months to December. Andrew Hunter, co-founder of Adzuna, said: “The recovery in the jobs market is far from over. The great news is unemployment has fallen at record levels, but wages are still stuck in a post-recession hangover – while the backlog of employees waiting for the right time to change jobs is clearing, salary levels are yet to catch up.”